The “excellent hope” for the impact of the Trump administration’s $1.5 trillion tax overhaul on the U.S. curtness is that it boosts investment and thus productivity, Minneapolis Federal Inventory Bank president Neel Kashkari said on Wednesday.
But whether it resolve do so and deliver faster economic growth in the process is unclear, he said at a dinner hostessed by Bloomberg News and broadcast on the regional Fed bank’s website.
“There’s a lot of maybes fancies and wishes between here and there,” Kashkari said, adding that public limited companies had plenty of access to credit before the tax cut to fund their investments.
“I’m not solid it’s going to lead to a dramatic change in investment. … I hope it does, that wish be good for the economy as a whole,” he said.
The Fed is widely expected to raise affair rates three times this year, starting next month.
Kashkari terminal year dissented at every Fed rate hike. Though he does not voter on Fed policy this year, he said on Wednesday that he would more readily wait on further hikes until there is a definitive increase in inflation toward the Fed’s 2 percent aspiration.
“Let’s pay attention and let’s be patient,” he said of inflation and inflation expectations, saying that if expense rises accelerated the Fed would act to contain them. But until then, Kashkari disclosed the Fed should keep rates low to squeeze more slack out of the labor call.
“There could be another million” Americans who could re-enter the labor hawk, he said.
Kashkari said he is watching for stronger wage increases as a trade mark of a tightening labor market.
A report earlier this month of a 2.9 percent extend in hourly wages in January rekindled expectations in financial markets for a bit myriad inflation and a possible faster pace of Fed rate hikes, but Kashkari spoke he was looking for more than one month’s worth of data on which to low decisions.