Mpls. Fed chief wants economic contingency plan from Fed

The head of the Federal Reserve Bank of Minneapolis says the Federal Reserve should provide the public with a contingency plan for changing economic conditions.

Minneapolis Fed President Narayana Kocherlakota said in a speech in Sioux Falls that the powerful Federal Open Market Committee should provide the public with "clear guidance" about how it will respond to a number of economic scenarios.

Kocherlakota has raised concerns about the Fed's promise to hold interest rates near zero until mid 2013. He said the Fed should make clear what it would do if core inflation rises while unemployment falls. That scenario that might normally force the Fed to hike interest rates to head off inflation.

A contingency plan would reduce consumers' and businesses' uncertainty about Fed policies, Kocherlakota said.