Fed’s Kashkari: US economy still falling short on employment and inflation

Minneapolis Federal Reserve Bank President Neel Kashkari, the only dissenter against the Federal Reserve's decision to raise interest rates on Wednesday, was quoted saying (via Reuters) that the US economy is still falling short on employment and inflation.

Key quotes:

   •   Dissented on rate hike because data don't support tightening
   •   Inflation still short of target, labor slack remains - Fed shouldn't behave as if 2% inflation target is a ceiling
   •   Once data support tightening, Fed should first publish plan on trimming balance sheet
   •   Should begin process of normalizing balance sheet soon
   •   Expects little market reaction to publication of Fed plan on balance sheet reduction
   •   Publishing balance sheet plan could trigger tighter financial conditions
   •   Fed should resume rate hikes only after it sees market reaction to balance sheet plan
   •   Not incorporating fiscal policy changes into his forecasts
   •   It's not clear that gradual rate hikes now are better than aggressive ones later