Minneapolis Federal Reserve President stepping down in 2016

Narayana Kocherlakota announced that he would be stepping down as president the Federal Reserve Bank of Minneapolis when his term ends in February 2016.

He said in a statement Friday after informing the bank’s board of his decision earlier this week:

“I became president of the Minneapolis Bank in October 2009 so that I could be of service to my country in an economic emergency. I have been honored to play a role in shaping the response to that dire situation.”

He dissented against the Fed’s policy decision in October and said he would prefer keeping rates low until inflation expectations gain, he was also opposed to ending the Fed’s bond-buying program.

Kocherlakota, 51, is considered to be one of the central bank’s most dovish officials, he has been a proponent of keeping interest rates lower for longer to lift up sluggish inflation – an accommodative policy aimed at getting more Americans back to work.

Narayana Kocherlakota

His vote at next week’s policy meeting will be his last.

Philadelphia Fed Chief Charles Plosser and Dallas Fed President Richard Fisher, policy hawks who have called for a retreat from the Fed’s easy monetary policy, have also announced that they will be stepping down early next year.

The Minneapolis Fed will next hold a voting seat on the FOMC in 2017.

Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, said:

“I think of Kocherlakota as the iconoclast on the FOMC. He’s been an interesting speaker, sometimes in the mainstream, sometimes not. He’s very thought-provoking, so I’m actually kind of sad to see him leaving.”

These resignations mean that Chairwoman Janet L. Yellen is going to be dealing with new people at the policy-making table as she tries to increase interest rates – expected to occur in the middle of 2015.