Minneapolis Fed President Neel Kashkari explained in an article the reasons for his dissent to the latest FOMC statement. He said, “I would have preferred the Committee make a stronger commitment to not raising rates until we were certain to have achieved our dual mandate objectives.”
His own proposed language was: “The Committee expects to maintain this target range until core inflation has reached 2 percent on a sustained basis.” “By eliminating both the direct reference to our assessment of maximum employment and any forecast of inflation climbing, this proposed language guards against the risk of underestimating slack in the labor market. ” he added.
Separately, Atlanta Fed President Raphael Bostic said he’s comfortable with inflation above 2% but wold look at more at the “trajectory than level”. If inflation went up to 2.3% but appeared stable, “that would be fine”. On the other hand, “if we were at 2.2 and the next quarter at 2.4 and then at 2.6 that trajectory would give me concern”.
