08/17/2010 02:17 pm ET Updated May 25, 2011

Narayana Kocherlakota, Minn. Fed Chief: Market's Reaction To Fed Latest Statement Was 'Unwarranted'

MARQUETTE, Mich (Reuters) - The Federal Reserve's decision last week to buy more U.S. government debt should not be viewed as a sign the economic outlook is worse than investors thought, a top Federal Reserve official said on Tuesday.

Last week the U.S. central bank's policy-setting Federal Open Market Committee repeated its pledge to keep interest rates extraordinarily low for an "extended period," and took the further step of saying it would begin reinvesting cash from maturing mortgage bonds to buy more government debt.

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