Kashkari Says Labor Slack, Low Inflation Led to His Dissent

With slack remaining in the labor market and inflation still below the Fed's 2% target, Federal Reserve Bank of Minneapolis President Neel Kashkari voted against raising the fed funds target rate this week.

"In summary, I dissented because the key data I look at to assess how close we are to meeting our dual mandate goals haven't changed much at all since our prior meeting," Kashkari said in a paper released on the Minneapolis Fed's web site Friday. "We are still coming up short on our inflation target, and the job market continues to strengthen, suggesting that slack remains. Once the data do support a tightening of monetary policy, I would prefer the next policy move by the FOMC to be publishing a detailed plan that explains how and when we will begin to normalize our balance sheet. Once we put that plan in place, and we see the market reaction to it, we can return to using the federal funds rate to remove monetary accommodation when the data call for it."

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