Neel Kashkari stood in front of the Federal Open Market Committee last week and voted to raise rates. He lost. Two other people also lost. That's what being one of three dissenters means.
Now Kashkari says it's time to "start slowly moving" rates up. He already tried that. It didn't work. The committee told him no. But here he is, doing interviews, explaining his position like anyone asked.
The man wants to raise rates while the rest of the Fed wants to cut them or hold them steady. That's not a dissent. That's a tantrum with a PhD.
Retail traders read this headline and immediately checked their portfolios. They saw red. They panicked. They sold everything at a loss. Then they remembered Kashkari doesn't set policy. The committee does. The committee that voted against him. So they bought everything back at a higher price.
This is the financial news cycle: one guy says something, nobody listens, journalists write it down anyway, idiots react to it.
Kashkari thinks inflation is lurking around the corner like a villain in a community theater production. The other twelve voting members think he's wrong. They have the same data he does. They looked at the same charts. They came to a different conclusion. Democracy in action.
He wants to move "slowly." That's the key word. Not quickly. Not decisively. Slowly. Like a man backing away from a mistake he hasn't made yet.
The Minneapolis Fed president will dissent again at the next meeting. He'll lose again. Journalists will write about it again. Traders will panic again. The cycle continues until Kashkari retires or learns what the word "consensus" means, whichever comes first.
Three dissenters walked into a Fed meeting. Sixteen other people were already there with a different opinion and the power to implement it.
Photo by Shubham Dhage on Unsplash
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