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


  • Says Fed could invert the yield curve and tip the economy into recession if it raises rates too aggressively