Narayana Kocherlakota is the current President of the Federal Reserve Bank of Minneapolis. He was in Bismarck-Mandan recently for a speaking engagement. As part of his trip, he took time to meet with a business roundtable to gather input and provide some insight into the economy. If you follow the Federal Reserve action and discussion(I know…only us policy geeks do such stuff) you would note that he is a bit of a contrarian to Chairman Bernake’s policy positions as of late. Here is a quick synoposis of his perspective.
In the short term, since November of 2010, the Fed has bought $600b in Treasuries as part of “QE2″. The good news is that the deflation risk seems to be off the table and the unemployment rate has fallen. The bad news is that growth was still sluggish in the first half of the year. He also expects the GDP will grow by 3% and inflation at 2% for some time to come. And, unemployment will not drop below 8% until the end of 2012.
The more thought provocative discussion in the meeting delt with the long-term perspective. What happens over the next 20 years. From his perspective we will continue with the skill bias technological change that emphasizes education. He is also concerned, as I think many are, that the education system in America is not preparing our kids to compete. While the heartland bucks this trend, the overall system is in need of reform.
Here in North Dakota, we continue to see a strong economy with a low unemployment rate. Last check, unemployment was a about 3% here in Bismarck-Mandan. Lowest in the nation.
