Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, took central bank transparency to a new level on March 21 when he took questions from Twitter users for a full hour — and answered as many as he could with class and often humour.
Kashkari, who dissented against the Fed’s decision to raise interest rates on March 15, said he did so because he is worried the economic data does not yet back up the notion that things are getting substantially better.
Moreover, he worries about an inflation rate that has for years fallen short of the Fed’s 2% target, suggesting the labour market and the economy are still operating well below their full potential.
“Based on actions rather than words, we are treating 2% as ceiling rather than target,” Kashkari had said in an earlier statement explaining his dissent.
He expanded on the issue in the Twitter session: “Symmetric means we care equally about undershooting and overshooting. So 2.3% should be as concerning as 1.7%.” The Fed should “average 2% over time,” he said, adding that this could mean tolerating somewhat above target inflation for several years.
Then, in response to a question from Business Insider on the potential drag on economic growth from banks deemed too-big-to-fail, Kashkari took a dig at one such institution, JPMorgan, by including the hashtag #AskJamieDimon in his reply.
The problem is not the current drag – its if/when they fail. BIS estimates huge cost: 158% GDP. #devastating #AskNeel #AskJamieDimon https://t.co/J3hVqFKo1I
— Neel Kashkari (@neelkashkari) March 21, 2017
Dimon has become a poster child for advocating weaker regulations on Wall Street despite widespread agreement that loose rules led to the most devastating financial crisis in modern history.
Ironically, JPMorgan’s own attempts to take questions on social media did not work out so well: the #AskJPM hashtag became the subject of widespread anger and ridicule.
Kashkari faced no such troubles, indeed expressing surprise that no Finance Twitter trolls had come after him.