Minneapolis Fed dove Kashkari warned that Fed tightening
Minneapolis Fed dove Kashkari warned that Fed tightening has led to low inflation and it should "proceed with caution" before tightening further, waiting until PCE inflation reaches 2%. The past dovish dissenter said that job growth, wage growth and inflation was weaker than it would have been had the Fed not hiked rates and he finds the "transitory" explanation of low inflation "tenuous." He blames labor market slack and falling inflation expectations for persistently low inflation, while allowing inflation expectations to slide gives the Fed less room to respond to a future economic downturn. Kashkari is known for his dovish views, though these remarks could help cool off the yield rebound following firm ISM and construction headline prints.