MANKATO — Neel Kashkari, president and CEO of the Minneapolis Federal Reserve Bank, is accustomed to deciphering complex studies done by his team of PhD economists, but he said some surveys in recent times are a puzzle to him and other economists.
“I think manufacturing in (the Mankato region) is strong,” he said during a visit Tuesday to Mankato.
“A lot of national manufacturing surveys have been downbeat over the past year, but when you look at the data, it seems like they’re manufacturing a lot.”
He said the same dichotomy exists when surveys gauge the general public’s views on the economy. “People seem gloomy, but they’re spending money and earning money.”
And there is more confusion because while inflation and interest rates have been relatively high, the economy has stayed hot and hiring has been brisk, he said.
“We raised rates aggressively to tap the brakes on the economy. That usually means fewer workers. But not this time.”
Kashkari spoke to a group of local business leaders and residents at an event hosted by Greater Mankato Growth.
He said the worker shortage has been a challenge for some time. “For Minnesota as a whole we don’t have enough people to fill our jobs.”
He said if he were designing an immigration system it would be by looking at where the country needs jobs and workers and prioritizing who is brought in and to where.
“But it is a politically fraught issue,” he said of immigration policy.
Kashkari is not a fan of cryptocurrency, viewing it as a high-risk gamble.
He said that when he speaks he always asks if anyone has ever used Bitcoin to buy anything — a cup of coffee, clothes, a car, a home. He has yet to find anyone who’s used it as currency.
He said people said buying crypto was a good hedge against inflation and high interest rates. But when inflation and interest rates went up, Bitcoin got beat up badly.
“If you want to invest in Beanie Babies and PEZ dispensers and Bitcoin, that’s your choice. I have nothing against Beanie Babies and PEZ dispensers, but I do against Bitcoin.”
He said the trip to Mankato was a combination of listening and learning as well as letting the public know a little about what the Fed does.
“These are great opportunities for people across the region to learn more about the Fed and I can learn more from them,” said Kashkari, who last visited Mankato in 2020. He said he tries to visit major centers across the district.
The Ninth District is composed of Montana, North Dakota, South Dakota, Minnesota, 26 counties in northwestern Wisconsin and the Upper Peninsula of Michigan. From plains to mountains, oil to soybeans, the district offers a wide variety of resources that support the economy.
The district has 1,100 Fed employees. Kashkari has been president and CEO since 2016. He serves as a member on the Federal Open Market Committee, bringing the Ninth Federal Reserve District’s perspective to monetary policy discussions in Washington, D.C.
He was instrumental in establishing the Opportunity & Inclusive Growth Institute, which has the mission is to ensure that world-class research helps to improve the economic well-being of all Americans.
Most recently, he’s supported the expansion of the Center for Indian Country Development, which advances the prosperity of Native nations and Indigenous communities through actionable data and research.
He earned a master’s in mechanical engineering was an engineer for NASA missions. He turned to finance and public policy, earning an MBA and working for Goldman Sachs and holding senior positions in the U.S. Department of the Treasury. He was the Republican nominee for governor in California in 2014, losing to Jerry Brown.