Minneapolis Fed President Kashkari: 'Now is the time to start slowly moving' rates up

Summary

Minneapolis Fed President Neel Kashkari explains his dissent in favor of a rate hike, citing persistent inflation, strong corporate earnings, and a resilient consumer and labor market. He argues monetary policy is not restrictive and that gradual rate increases are preferable to waiting until inflation becomes entrenched. He also discusses Fed communication and meeting frequency.

• Kashkari dissented at the last FOMC meeting, arguing for a gradual rate increase.
• He highlighted five-plus years of above-target inflation, high energy prices, and uncertainty in the Strait of Hormuz.
• He pointed to robust corporate earnings, a resilient consumer, and a strong labor market as signs policy is not restrictive.
• Kashkari stated that three rate hikes by year-end are not impossible if inflation persists.
• He noted the Fed is considering a review of its communication strategy and meeting frequency.
• He emphasized the value of explaining the Fed's reaction function rather than making predictions.