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Kashkari: Fed still in good shape with several board seats open

The president of the Federal Reserve Bank of Minneapolis expressed no concern with the fact that the Federal Reserve Board will likely have four of its seven seats open soon, praising President Donald Trump's selection of one governor and the next board chair.

"So far, President Trump has picked two people who are serious, credible policymakers," Minneapolis Fed President Neel Kashkari said, referring to Randal Quarles, who was recently sworn in as a governor and vice chairman of supervision, and Jerome Powell, who has been nominated as the next Fed chair. If Trump's future selections are similar, Kashkari said the Fed would be in a good position.

In a public appearance in Winona, Minn., he also noted that the Trump administration's influence on the Fed is kept in check by the independence of the 12 regional Federal Reserve banks, whose leaders are not appointed by the U.S. president.

Kashkari, who dissented against both rate hikes this year, will lose his vote on the monetary-policy-making Federal Open Market Committee in 2018. The committee's last scheduled meeting is in mid-December, and Kashkari indicated he would oppose a rate raise in this meeting as well.

"I'm seeing no reason to tap the brakes on the economy" as inflation is continuing to run lower than the Fed's 2% target, he said.

According to the CME Group's FedWatch tool, futures markets are expecting the FOMC's target to rise to a range of 1.25% to 1.5%. It set the probability of that policy decision at 92.8%.