How Many 10 year notes do you need?

November 18th, 2014 1:38 pm | by John Jansen |

If Kocherlakota were a client and I were still hawking bonds for a living if I had heard this bullish peroration on the phone I would  have immediately asked him how many 10 year notes he wanted me to offer him. He thinks that it will be inappropriate to hike rates in 2015 and he does not belive that inflation will return to 2 percent until 2018.

Via Bloomberg:

***** Bloomberg bullet points and Story *****

*MINNEAPOLIS FED’S KOCHERLAKOTA SPEAKS IN ST. PAUL, MINNESOTA

*KOCHERLAKOTA REMARKS IN TEXT SIMILAR TO NOV. 12 SPEECH

*MINN FED’S KOCHERLAKOTA REPEATS NOV 12 SPEECH IN ST PAUL

*KOCHERLAKOTA: 2015 RATE RISE INAPPROPRIATE DUE TO LOW INFLATION

*KOCHERLAKOTA: DON’T RAISE RATES WHILE INFLATION OUTLOOK SUB-2%

*KOCHERLAKOTA REPEATS DOESN’T SEE INFLATION UP TO 2% UNTIL 2018

*KOCHERLAKOTA: TIMING OF RATE LIFT-OFF TO BE DATA-DEPENDENT

Kocherlakota Repeats Inappropriate for Fed to Lift Rates in 2015

By Vivien Lou Chen
Nov. 18 (Bloomberg) — Minneapolis Fed President Narayana
Kocherlakota reiterates view that it’s inappropriate for FOMC to
raise rates next yr, given “sluggish” inflation outlook.
* Personal view is inflation won’t return to 2% goal until
2018, Kocherlakota says in text of speech in St. Paul, Minn.
* Speech is same as one he gave last week
* Speech is same as one he gave last week</li></ul>
* There’s uncertainty around outlook, so timing of lift-off
needs to depend on data
* FOMC should be clear its inflation objective is symmetric
* “Inflation below 2% is just as much of a problem as
inflation above 2%”
* Inflation persistently below 2% creates doubt about
whether Fed is truly aiming for 2%
* Inflation persistently below 2% creates doubt about
whether Fed is truly aiming for 2%</li></ul>
* Fed needs benchmark 2-year time horizon for returning
inflation to 2%
* NOTE: Kocherlakota has been head of Minneapolis Fed since
Oct. 2009; he dissented from Fed’s March 19 decision based
on one paragraph, which he said weakened FOMC’s credibility
on inflation, and from Oct. 29 decision, saying he preferred
to keep QE in place and rates low until 1 year-2 year
inflation outlook returns to 2%

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