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Fed's Kocherlakota says discretion trumps rule for monetary policy

(Corrects name to American Economic Association from American Economics Association in third paragraph)

BOSTON, Jan 4 (Reuters) - The Federal Reserve is better off using its discretion when determining monetary policy rather than following a pre-determined rule, a top Fed official said on Sunday.

Minneapolis Federal Reserve Bank President Narayana Kocherlakota weighed in on the controversial issue of how the Fed determines its monetary policy, as Republican lawmakers and some Fed officials push the central bank to establish a rule.

Kocherlakota, in slides prepared for a presentation here at the annual American Economic Association conference, asked if a central bank should be required to follow a pre-specified rule when setting the level of monetary accommodation.

"In the U.S., discretion is better than any rule," he said.

(Reporting by Michael Flaherty; Editing by Meredith Mazzilli)