The perennial dove on the Fed board states his case via the Financial Times
- Argues to not only cut rates in September, but also use forward guidance to provide even more of a boost to the economy than a rate cut alone can deliverr
- The Fed can influence long-term rates by giving guidance about the future path of short-term equivalents
In the article (may be gated), Kashkari continues to argue for the use of forward guidance now and not only when after the Fed funds rate has been lowered to the zero threshold.
He likens such a scenario as "driving a car into a ditch and then declaring you are staying there by choice". Hence, stating that it is better to avoid that altogether and implement forward guidance now before it is too late.
Just be aware that Kashkari is arguably the most dovish member at the Fed but he is not a voting member on the FOMC this year. As such, his dovish views are well-known and isn't really anything new to market participants.
