Minneapolis Federal Reserve Bank President Neel Kashkari said Tuesday that while the U.S. economy is closer now than it was in March to full employment, he still does not know “if we are there yet,” and that the recent decline in core inflation is “concerning.”
“We are closer, but we don’t know how far the shore is,” Kashkari told reporters at the bank’s headquarters. His comments on Tuesday follow Fed Governor Lael Brainard’s assessment Monday that there was still a “question” about whether, at 4.4 percent unemployment, there was still slack left in the U.S. labor market.
The Fed releases minutes of its April meeting on Wednesday, and many investors anticipate it will add to expectations that the Fed is firmly on course to another rate hike in June. But remarks this week from Brainard, Kashkari and Dallas Fed President Robert Kaplan suggest that at least some are still feeling their way. Kaplan on Monday expressed confidence in the Fed’s plan to raise rates two more times this year, but said he planned to be “patient” when it comes to making sure inflation is on track toward the Fed’s goal.
Kashkari is one of the central bank’s most dovish policymakers and in March was the lone dissenter against the Fed’s decision to raise rates. Asked if he would dissent once more next month, he said he has not decided.
“Anything is on the table, depending on how the data comes out,” he said, adding that he would have more confidence if core inflation were moving steadily toward the Fed’s 2-percent goal or even moved temporarily above that goal.
“Right now inflation is going in the wrong direction, and so that is concerning to me,” he said.