Minneapolis Fed President Kashkari:

  • Fed policy is helping to bring back displaced workers
  • Cautions he could be more hawkish if conditions change
  • Weak productivity a troubling sign
  • Long-term productivity growth is outside of Fed's scope
  • Expectations don't see inflation about 2% in near future
  • Survey-based inflation expectations generally stable
  • Market-based inflation expectations quite low
  • If Fed can have impact on workforce, should use it
  • More focus is needed on long-term solutions to US problems

Dovish stuff from Kashkari but it's no surprise. The implied chance of a June rate hike in the Fed funds futures market is just 4% and only 44% by year end.