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The slow rise in consumer prices shows the U.S. economy is not growing as quickly as it could, said Minneapolis Federal Reserve Bank President Narayana Kocherlakota. 

The inflation rate is running near zero thanks to cheap fuel, he said. Without factoring in gasoline and food, prices are only growing at about 1.2 percent a year. Kocherlakota said he thinks the Federal Reserve should keep a benchmark interest rate near zero until inflation rises to the target level of 2 percent.  

Kocherlakota said low inflation translates to slow growth in wages and jobs. 
 
"We have more work to do," he said on 

. "If you look at the numbers over the past seven or eight years, we have a lot of room for improvement in how we're doing in getting employment back up."

The U.S. unemployment rate fell slightly to 5.4 percent in April. Minnesota's was 3.7 percent.

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The inflation rate is running near zero thanks to cheap fuel, according to Narayana Kocherlakota. The low inflation translates to slow growth in wages and jobs.

In a year when many are expecting the Federal Reserve to raise interest rates for the first time since the recession, Minneapolis Federal Reserve President Narayana Kocherlakota has distinguished himself as an outspoken critic of that idea, saying the country's economy is not yet on firm enough footing. Kocherlakota plans to step down from his position at the bank at the end of this year. He joined Tom Weber to talk about his tenure with the Fed and the various activities of the bank.

Mpls. Federal Reserve head: U.S. economy has untapped potential

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