Apparently nothing in the past two months convinced the Minneapolis Fed leader, Neel Kashkari, that interest rates should rise.
In his second time with a say, Kashkari on Wednesday voted just like the first time — to hold rates steady. He was the only one of the 10-person panel to do so, the Fed said in announcing the quarter-point hike to the federal funds rate.
Neither the Fed nor Kashkari immediately explained his reasons. The Fed's statement said Kashkari "preferred at this meeting to maintain the existing target range for the federal funds rate."
In an online essay published in early February, Kashkari signaled a more dovish take on the economy.
Of the Fed's so-called dual mandate to keep inflation in check and drive for maximum employment, Kashkari wrote inflation was under control but the country may not have reached full employment. "That suggests that somewhat accommodative monetary policy would still be appropriate to close those gaps," he wrote.
He nodded at the risk that inflation could suddenly take off, forcing the Fed to quickly adjust interest rates upward, but he added that's not a good enough reason to raise rates. "Some argue that gradual rate increases are better than waiting and having to move aggressively. It isn't clear to me that one path is obviously better than the other," he wrote.
Evan Ramstad
