Fed's Kashkari: Communicating Fed's reaction function is helpful
SPY•Kashkari says clear Fed reaction function guidance helps markets
Aug. 5 (Reuters) - Clearly communicating what the Federal Reserve's "reaction function" will be to various scenarios is helpful for the public and markets and should be continued, Minneapolis Fed President Neel Kashkari said on Wednesday.
Kashkari, speaking in a CNBC interview in which he repeated his call for the Fed to begin a series of small interest rate hikes to contain inflation that is running above the Fed's 2% target, said it is valuable for market participants and others to understand how the Fed might likely respond to a given set of economic developments.
"I think there is value in continuing the tradition of explaining our reaction function to the public, and letting the public figure it out from there," he said. His comments follow moves by new Fed Chairman Kevin Warsh to curtail how much the Fed describes what it may do in the future.
