Minneapolis Federal Reserve Chairman speaks at NMU

MARQUETTE — Northern Michigan University students had the opportunity to learn about the Federal Reserve and the economy from the Minneapolis Federal Reserve Chairman Tuesday.

Narayana Kocherlakota spoke to students about a number of topics, including how the Federal Reserve works, how the reserve makes monetary policy, and how interest rates can affect employment.

“One way to tell at least in terms of monetary policy, there’s other choices that can affect that number, but in terms of monetary policy, they way we can tell if we can do better (in terms of employment rates) is through the inflation rate,” Kocherlakota said.

He also explained how the Federal Reserve has an impact on raising or lowering inflation.  He expects the inflation rate to be below 2% through 2018.

“That means there’s room for more monetary policy to be helpful in terms of that number, in terms of boosting demand without generating too much inflation, you can boost demand and thereby create more jobs and exert downward pressure on the unemployment rate for everybody of course, especially for those 18-24 (years old),” he said.

The Minneapolis Federal Reserve is the ninth of twelve Federal Reserve districts across the United States.  The district includes the Upper Peninsula and stretches to Montana.