Minneapolis Fed President Neel Kashkari’s Remarks

Minneapolis Fed President Neel Kashkari commented on the recent strong September jobs report, indicating that the Fed appreciates the robustness of the economy.

“It looks like it is still a strong labor market…it’s really good news as we want to keep a strong labor market,” Kashkari stated, noting the impressive jobs data.

He further remarked that the strong labor market defied historical patterns, where aggressive rate hikes typically lead to increased unemployment:

“Traditionally, when the Fed has raised rates aggressively that usually manifests in weakness in the labor market and could [trigger] a big increase in unemployment.”

Kashkari highlighted that the resilience of the job market amid falling inflation is a positive sign:

“We have not seen that, so that’s a really good fact that the job market has stayed strong while inflation has come down.”

He emphasized that the Fed’s focus has transitioned from tackling high inflation to monitoring potential rises in unemployment:

“The balance of risks has shifted away from higher inflation towards maybe higher unemployment.”

While acknowledging the lag in monetary policy effects, Kashkari noted no significant evidence of past rate hikes impacting the economy just yet.