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What The Newest Member Of The FOMC Really Thinks About The Fed's Policies

With the appointment of Neel Kashkari as Minneapolis Fed president, and little to no detail on his policy persepctive, we found the former Goldman banker and bailout boss's Twitter feed provided considerable color...

Starting out, he is "for" fed Independence (though one wonders how he reconciles working for Goldman, then the Treasury, then PIMCO and then the Fed as being anything remotely "independent")...

I think it's better if the Fed sets mon. policy independently than trying to satisfy the whims of politicians.

— Neel Kashkari (@neelkashkari)

Remarkable to see

weigh in on Fed chair selection. Making Fed less political should be the goal. http://t.co/rihbTjgHA6

— Neel Kashkari (@neelkashkari)

But is the first to admit The Fed is entirely political...

In other words, give me Syria and you get Yellen. Don't and you get Summers.

— Neel Kashkari (@neelkashkari)

And then defends The Fed's policies - with some actual common-sense...

 

I think they are trying to do what they can for unemployment. But problems are bad fiscal policy, which monetary policy can't help.

Clearly has some real-world perspective on just how it all works...

Insider trading doesn't require new laws of physics, just one bad actor. How many people knew the Fed's decision before 2pm? dozens?

— Neel Kashkari (@neelkashkari)

Then some specific on policies...

Sorry Japan, printing money is morphine. makes u feel better but doesn't cure. BOJ Unveils Bold Bid to End Deflation http://t.co/9G9mnAOdOq

— Neel Kashkari (@neelkashkari)

And then demolishes the mainstream narrative of falling unemployment rates...

Falling labor force particip makes the headline rate meaningless. “

: Is the real US unemploy rate 11.3% or 7.5%? http://t.co/RZRVkB5Nlt

— Neel Kashkari (@neelkashkari)

But then goes a little deeper into the policy consequences - with a rather shocking admission that we are sure Ms. Yellen will not like...

 

Does

realize that had the Fed been much more aggressive as he wanted, inequality would be worse? http://t.co/KBLH1N8G2O

— Neel Kashkari (@neelkashkari)

And then finally, perhaps most crucially given the current box in which The Fed has placed itself...

Maybe Fed should just admit: "We will keep rates at zero until inflation is staring us in the face (and then we will freak out)."

— Neel Kashkari (@neelkashkari)

Market's response to the jobs report shows the tough spot the Fed is in. Patients get upset when the morphine ends. http://t.co/hokDzP1jbQ

— Neel Kashkari (@neelkashkari)

*  *  *

Finally, we note that in 2017, 4 of the 5 voting regional Fed presidents will be ex-Goldman... just saying.