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Fed's Kashkari - Fed should be patient, allow inflation to build

Fed's Kashakri's comments are crossing the wires via Reuters-

  • Fed should be patient, let inflation build. 
  • Don't know if the US is at full employment. 
  • We are not sure about the neutral rate or output gap either. 
  • Best hope is that tax cuts lead to greater investment and productivity. 
  • Is very focused on wage growth, labor market slack and inflation. 
  • 2-percent inflation target would give Fed more flexibility in fighting future downturns. 
  • 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. 
  • Wants to see definitive signs of inflation rising to 2 percent before supporting more rate hikes. 

 

 

 

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