Minneapolis Fed president takes questions in Ashland
ASHLAND — Normally the mere mention of the words "monetary policy" will put the average crowd to sleep, but the president of the Federal Reserve Bank of Minneapolis kept local residents engaged for an hour on Wednesday night — and they wanted more.
Neel Kashkari took questions on the central banking system, explained how the Fed balances the "see-saw" of inflation and employment and offered his stance on financial regulations during a community forum at the Northern Great Lakes Visitor Center.
Kashkari also said, in an interview after the event, that mobility is almost mandatory for individual economic success. He recounted a visit to the Iron Range shortly after starting in his role in January 2016.
"I pointed out to the (laid-off) workers there that there are a lot of skilled trade jobs around the Twin Cities," he said. "You may not get the ideal job you want in the location you want, and you may have to move for that opportunity. We all want to live where we want to live, but it doesn't always line up with what our skills are, and where the needs are."
Northern Wisconsin has the highest unemployment rates in the state, much like northern Minnesota's stubbornly high rates compared to statewide and urban numbers that are approaching full employment.
Kashkari called monetary policy — setting interest rates — a "blunt instrument" that can't target certain regions or populations that may need more help than others. But he seemed to sympathize with residents who asked him questions about how rural areas can see the same kind of economic success many metro areas are enjoying.
He was the only voting member of the Fed to say no to an interest rate hike in March, citing "slack" in the labor market and inflation sitting slightly lower than it should be. Following the forum he said many communities can be hurt by the urban/rural disparity in opportunities, but that doesn't have to be the case.
"Do you begrudge your kids for moving and going and getting an opportunity?" he posited. "If we can make these communities more attractive for young people to want to come back — that has potential."
More than once Kashkari stressed the importance of education on economic outcomes no matter the location.
"A huge determinant of economic success, as individuals, is the quality of the education you get," he said. "Our research at the Minneapolis Fed shows early childhood education ... just after birth it becomes very important. Early childhood education is very important to achieve the outcomes we all want."
More than 50 people gathered to see Kashkari talk on Wednesday night. The event is part of an ongoing series of forums that the Minneapolis Fed puts on to take the temperature of the region's economy.
The Federal Reserve Bank of Minneapolis covers Minnesota, Montana, the Dakotas, northern Wisconsin and the Upper Peninsula.
Kashkari, 43, is serving a five-year term as president and said he'd like to stay on for as many terms as he can. An Ohio native, mechanical engineer by trade and onetime candidate for governor of California, Kashkari joked he hasn't been dissuaded by the weather yet.
"My only disappointment in coming to Minnesota is how lame the winters have been so far."