Minneapolis Fed Chairman Neel Kashkari said Thursday that he would not have an instinctive panic attack if inflation rises at an annual rate of 4%. “It would depend on why” inflation hit 4%, Kashkari said in a discussion with Harvard University economist Greg Mankiw sponsored by the Economic Club of New York.
It would be important to determine whether the high inflation was due to something temporary, such as a blockage on the Suez Canal, or something else that was more lasting, he said. Kashkari has been one of the more dovish regional Fed chairmen since joining the Fed in January 2016. It could be argued that the Fed’s Open Market Committee moved in his direction. During the discussion, Kashkari said that he believes there is still a lot of slack in the economy. He said the actual unemployment rate is more than 9.1% than the 6% unemployment rate for March reported by the Labor Department last week. Kashkari said he supported the new Fed policy framework and said it meant the Fed would not “head off the recovery” as it had in the past. “We are always wrong. And it was the worker who paid the price, ”he said. See also: Fed officials split on inflation outlook Stocks were moving higher and near record highs. The Dow Jones Industrial Average DJIA, + 0.08% was up 18 points in afternoon trading.