Falling real rates put US ‘at risk of financial instability’, says Kocherlakota

Narayana Kocherlakota

US long-run real interest rates in conditions of full employment have seen a "notable decline" over the last decade, increasing the threats to the economy, Federal Reserve Bank of Minneapolis president Narayana Kocherlakota said in a speech on August 19.

Policy-makers need to drive the cost of debt down, Kocherlakota told an audience at the Bank of Korea conference in Seoul. If they do not, they risk financial instability and monetary policy stranded at the lower bound.

Kocherlakota defined the

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: