Narayana Kocherlakota didn’t quite say that September is too early to scale back the Fed’s $85 billion-a-month bond-buying program. He stopped just short. 
But the president of the Federal Reserve Bank of Minneapolis said the central bank “should be providing more stimulus to the economy, not less,” and is "failing to provide sufficient stimulus to the economy."
The statements come less than two weeks before a key Fed meeting where central bankers will decide whether to slow their purchases of mortgage-backed securities and Treasurys.

The bond-buying program, meant to goose the economy to faster growth, has helped drive down interest rates across the economy, including for mortgages.

The potential beginning of the end of the program has stirred up markets, driven up mortgage rates and pushed up yields on 10-year Treasury notes. 65 percent of economists surveyed by Bloomberg last month said they thought the Fed would start to taper the bond-buying at a Federal Open Market Committee meeting in two weeks.
Despite the massive, unprecedented scale of the program, Kocherlakota believes the Fed is not doing enough to help the economy recover. Unemployment is still 7.4 percent, and he has said multiple times that interest rates should stay extraordinarily low at least until joblessness falls another two points to below 5.5 percent.
“The U.S. economy is recovering from the largest adverse shock in 80 years,” he said in a Wednesday speech at the University of Wisconsin-Lacrosse. “A historically unprecedented shock should lead to a historically unprecedented monetary policy response.”
Kocherlakota is a non-voting member of the Federal Open Market Committee, which meets Sept. 17-18. He will not vote until next year, but he participates in the discussions. The uncertain outcome of the meeting is the subject of intense speculation, and has roiled financial markets in emerging economies.

Fed officials have hinted since May that they could start to scale back the program if the economy starts to improve quickly enough. Friday’s jobs report, which is expected to show the economy added bout 175,000 jobs, should weigh heavily on the decision-making process.
(photo by Richard Sennott, of Narayana Kocherlakota at the Federal Reserve Bank in 2012)