(Reuters) - Minneapolis Federal Reserve Bank President Narayana Kocherlakota said on Monday he was returning to academia, after years of failing to persuade colleagues in the U.S. central bank to support more accommodative monetary policy.
Kocherlakota said in a statement he had accepted a job as a professor of economics at the University of Rochester, in New York state, starting Jan. 1. He had said he would leave by February 2016. Before taking his job in 2009, he had been a professor at the University of Minnesota.
The bank has given no details of its search for a successor.
The Dallas Fed is also seeking a new head after longtime and extremely hawkish chief Richard Fisher retired in March.
The searches come at a critical time as the Fed debates when and how fast to raise interest rates it has kept near zero since December 2008.
The banks’ new leaders will vote on Fed policy in 2017 under a system of rotating seats among the 12-bank regional system.
The Minneapolis Fed oversees a sprawling but sparsely populated region including the mountains of Montana and the North Dakota oilfields and has had less influence than other Fed banks with bigger research staffs, such as New York and Chicago.
Kocherlakota tried to change that. In a September 2012 speech that made him the Fed’s most outspoken dove, he advocated that the Fed promise to keep rates low until the unemployment rate, then 8.1 percent, fell to at least as low as 5.5 percent.
He lost that argument to colleagues who thought that was too aggressive and could fuel too much inflation. It turns out he may have been right. In May, the rate registered 5.5 percent; inflation has lingered below 2 percent for three years.
Hawks typically worry about the threat of too-high inflation and want to raise rates sooner than later, while doves tend to focus on too-low employment and advocate keeping rates lower for longer.
Kocherlakota has continued to stake out a dovish stance, calling for no rate hikes until the second half of 2016, later than anyone else.
Last month he voiced disappointment over his inability to bring more policymakers over to his viewpoint.
”I wish I were more persuasive,“ he told reporters. ”My own perspective is we would be in better shape if I were able to. On the other hand, I hope they are right and I am wrong.”
Reporting by Ann Saphir; Editing by James Dalgleish