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Fed's Kashkari signals dissent vote on third rate hike

Minneapolis Federal Reserve Bank President Neel Kashkari hinted he may dissent again in December when the Fed is widely expected to raise rates for the third time in 2017 due to low inflation, Reuters reported Nov. 28.

"Because inflation is low, I am seeing no reason to tap the brakes on the economy," Kashkari said in a town hall event at Winona State University in Minnesota.

In explaining his position, Kashkari said inflation has weakened in 2017 despite the fall in unemployment, and slow growth in wages suggests there is still slack in the labor market. The unemployment rate stood at 4.1% in October and is expected to fall further this year, the report said.

"My perspective is, let's allow the job market to continue to strengthen, allow more Americans to go back to work, allow wages to strengthen, and then, if we start to see inflation creep back up to our 2% target, we can tap the brakes then," Kashkari said.

"I don't see any reason why we have to tap the brakes, when inflation is continuing to run low," he added.

Kashkari dissented on both rate hikes in March and in June this year, and his view sets him apart from other Fed officials who are concerned that a lack of an interest rate hike in December, the last meeting of the committee this year, would overheat the labor market, Reuters said.

Dallas Fed President Robert Kaplan, who also votes on policy this year, said Nov. 27 that a rate hike would be appropriate in the "near future."