Kashkari Says Clear Communication of Fed's Policy Reaction Function Helps Markets

Federal Reserve official Kashkari said Wednesday that it is helpful for the Fed to clearly explain to the public and markets how it would adjust its policy reaction under different economic scenarios — a framework known as the "reaction function" — and that this practice should continue. Speaking on CNBC, Kashkari said explaining the central bank's policy reaction mechanism remains valuable. He repeated his call for the Fed to begin a series of modest interest-rate increases to bring down inflation, which currently exceeds the Fed's 2% target. "I think there is value in continuing the tradition of explaining our policy reaction function to the public, and then letting the public make their own judgments based on that information," Kashkari said. The remarks were reported by Jinshi.