Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, crossed the wires in the last minutes, arguing that the Federal Reserve’s forward guidance that rates would go up was hawkish and had a contractionary effect on the economy.
“There is more slack in the labor market, it’s not time to tap the brakes on the economy,” Kashkari added. “The monetary policy is not the right tool to respond to trade war but it’s the only tool that we have.”
The US Dollar Index largely ignored these comments and was last down 0.3% on the day at 98.40. Below are some additional quotes, per Reuters.
“We can’t model the shock trade war will have on psychology and how its going to ripple through the economy.”
“It’s worth analyzing the control of the yield curve as a potential monetary policy tool, similar to Japan.”
“Wage growth of 3.5% to 4% would suggest maximum employment, but wage growth has been falling and the labor market is showing signs of softening.”
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