Higher rates do not lead to faster growth – FOMC’s N.Kashkari

Minneapolis Fed Neal Kashkari (voter, dovish) said today that the US labour market has not fully recovered, while he justified the recent dissent for a rate hike by the absence of inflation.

Kashkari said that growth has been slower than expected while he advocated for a reduction of the Fed’s balance sheet before raising Fed Funds rate. He also favours a plan to roll off the balance sheet.

He also noted that inflation or wages are not sending off alarm bells now and that there is room for further improvement in the labour market.