Daily Management Review

Kashkari Of Fed Recommends A Wait Before Interest Rate Hike


03/01/2018


Market needs to be allowed to work as people need to find job to use up the “slack” in the labour market. However, if the interest rates are to be increased, the ongoing process of employee hiring would be slowed down.



Following the statement made by Jerome Powell, the chairperson of Federal Reserve, to Congress, wherein he revealed his “confidence” boost with a “strengthening economy” along with the rising “inflation and wages”, one of Powell’s colleagues was for a wait before hiking the interest rate till “those increases are obvious”.
 
In the words of “Minneapolis Federal Reserve President”, Neel Kashkari:
 “I want wage growth to continue to build, I want to see inflation move toward our 2-percent target, I want to see more evidence that the slack in the labor market is being used up: those are going to be the key factors that I pay attention to in making my recommendation”.
 
As per the traders and investors, Powell, as the chairperson of Fed, is likely to complete “his first policy-making meeting” of hiking interest rates along with a “promise of at least two and possibly three more rate increases this year” by the coming month. As per Kashkari’s statement echoing “dovish views” which he has been harbouring for over a year, Powell’s move could get the latter into “some opposition to further tightening begun under his predecessor Janet Yellen”, at the least.
 
Given the tight situation of the labour market, employers are being encouraged to hire workers, which otherwise been outside the periphery of their consideration, as some workers being hired hold “drug problems or criminal records”, reports Kashkari.
 
Interest rate hike would slower the process as companies may find it expensive to “operate and expand”. He urged:
“We need to let the market work and allow people to find jobs and allow wages to grow. I think we should let the process continue.”
 
 
References:
reuters.com







Science & Technology

Study: Machine learning is five times more harmful for the environment than a car

Would Singapore Be The First One To Bring Lab Grown Shrimps To The Global Market?

Apple Patents A ‘Foldable Screen’ For Creating Foldable iPhones

Research Shows Air Pollution Causing Birth Defects

Microsoft tells about operating system of the future

Study: Third of US kids wake up at night to check their smartphones

Deepfake AI Technology Used By Researchers To Bring Mona Lisa ‘To Life'

China is developing technology to capture greenhouse gases

IEA: The growth of renewable energy is slowing

Google introduces new smartphone and beta Android Q

World Politics

World & Politics

Iranian Foreign Minister urges other countries to abandon the dollar

The EC recommends starting penalty procedure against Italy

European Breweries To Up Their Brewing Innovation Amid Green Legislations

‘Frequent’ Shootings Causes China To Issue Travel Advisory Against US To Its Citizens

Facebook’s appeal to stop ECJ data case rejected in Irish Supreme Court

Trump: Japan to buy 105 F-35 fighters from the USA

Theresa May to resign on June 7

The Earth Is ‘Not On Track’ To Tackle Global Warming: The U.N. Secretary General