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.