More comments from the Fed’s Kocherlakota:

  • Asset bubbles are something the Fed has to keep in mind
  • But, right now, financial instability risks not big enough to impact monetary policy decisions
  • the Federal Reserve can influence inflation expectations, concerned on signal it is sending

More:

  • Low US inflation means there is insufficient demand for goods and services
  • There is not enough demand in the US to utilize labor slack
  • When the time comes to raise rates, the Federal Reserve will raise the rate paid on excess reserves

These from the Q&A session

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His earlier comments are here: Fed’s Kocherlakota: If inflation outlook rises, could support rate hike in 2015