Fed's Kashkari: US interest rates are now modestly accommodative

Author: Adam Button | Category: Central Banks

Comments from Kashkari in Minneapolis

The idea here is that the Fed is unsure what neutral rates are. Last year at this time Powell was arguing that neutral was at 2.50% or higher. Now Kashkari is is pushing an idea that it's around 2%. No one knows the answer.

At the end of the day, 2% means you can borrow at 2% overnight and it's only stimulative if people want to take it and invest in something productive.

  • Repeats that US economy is not a full employment yet
  • Wage growth is below inflation plus productivity
  • Wage growth suggests US not a full employment

More to come

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