Neel Kashkari on track for another five years as leader of Minneapolis Fed

Neel Kashkari plans to stay on for a second term as president of the Federal Reserve Bank of Minneapolis.

Kashkari, 47, in late 2015 was hired to a five-year term as leader of the Minneapolis Fed, which has oversight of banking in the north central part of the country.

Though he built a strong record of research, public engagement and advocacy for low-interest rates in the job, it wasn't clear whether Kashkari — a university-trained engineer and a former investment banker, U.S. Treasury official and candidate for governor of California — would remain at the regional bank as his term neared an end.

North Dakota Gov. Doug Burgum let the cat out of the bag on Wednesday during his keynote speech at the Minneapolis Fed's annual regional economic conditions conference, held virtually because of the pandemic.

"Congratulations to you on your reappointment," Burgum said to Kashkari. "Everybody in the Ninth District I know is excited that we have you for at least another five years, we hope, 'cause you're doing a fantastic job."

The Ninth District, one of 12 in the Federal Reserve System, includes Minnesota, North Dakota, South Dakota, Montana, northwestern Wisconsin and the Upper Peninsula of Michigan.

Reappointment is a multistep process that includes approval from the regional bank's board of directors and the central bank's board of governors in Washington.

As part of his role as president, Kashkari serves on the rate-setting Federal Open Market Committee, and had a vote on that committee in 2017 and 2020. During his tenure, he developed a reputation of being a dove, or a proponent for keeping interest rates low.

He has also been a prominent voice pushing for tighter bank regulations as well as for reducing economic disparities.

At the Minneapolis Fed, he helped establish the Opportunity & Inclusive Growth Institute in 2017 to provide more research on those inequities. After the death of George Floyd, he also has spearheaded an ongoing series in partnership with other regional Fed banks tackling different aspects of racism and the economy.

Last year, Kashkari joined forces with retired Minnesota Supreme Court Justice Alan Page to propose an amendment to Minnesota's Constitution that would say that all children have a fundamental right to a quality public education. That amendment is expected to be debated again this legislative session.

Louis Johnston, an economics professor at the College of St. Benedict and St. John's University, said he wasn't initially sure if Kashkari would stay at the Minneapolis Fed for long. But he added that Kashkari's effort on the proposed constitutional amendment was a sign that he might stick around.

Kashkari joined the Minneapolis Fed in 2016 after a nationwide search to find a successor to Narayana Kocherlakota, who decided not to seek a second term as president and to return to academia. The president before that, Gary Stern, served in the role for nearly 25 years.