Neel Kashkari, Minneapolis Fed President speaking at a Bloomberg event
- Says US economy is doing very well; surprised at confidence, optimism due to tax cut
- Says not clear how much of a long-term difference tax cut will make
- Don't really know if US is at full employment
- Says we are not sure about neutral rate, or output gap either
- Best hope is that tax cut leads to greater investment and productivity
- Federal Reserve should be patient, let inflation build
- Hitting 2% inflation target would give the Fed more flexibility in fighting future downturns
- He is very focused on wage growth, labour market slack, and inflation
- Fed will respond if inflation starts to show itself
- We are seeing some signs of inflation building but takes more than one month's data
- Says wants to see definitive signs of inflation rising to 2% before supporting more rate hikes
- Could be another million Americans on sidelines of labour market, don't want to cut that off
Headlines via Reuters
More:
- Says Fed could invert the yield curve and tip the economy into recession if it raises rates too aggressively
