Kashkari (Presidnet of Minneapolis Fed): "We were at maximum employment. We are now at maximumer employment." Michael Lebowitz: "So explain why monetary policy

Kashkari (Presidnet of Minneapolis Fed): "We were at maximum employment. We are now at maximumer employment." Michael Lebowitz: "So explain why monetary policy is still in emergency mode. Funds at 1.25-1.50 and over $4 trln balance sheet." Kashkari: "I thought the "tongue-in-cheekiness" of my tweet would be obvious. Allow me to translate: We keep saying we are at max employment and then all these people choose to work. It suggests we weren't really at max employment." Reggie Palatty: "Dude I loved you in the Mummy Returns" Kashkari: "I was better in the original" https://twitter.com/neelkashkari/status/972142317162369024 https://twitter.com/neelkashkari/status/972142317162369024 To take a step back, the official unemployment # is only important in so far as its in the Federal Reserve's dual mandate to maximize employment while keeping inflation steady and moderate. Kashkari's comments suggest that we haven't hit max employment, and that not even high ranking members of the Fed have a firm grasp on what "max employment" looks like in the contemporary economy. Fed wants to wait until we hit "max employment" to begin normalizing, which is akin to pumping the economic brakes. Normalizing = raising interest rates + removing bank liquidity = increasing cost and friction of borrowing/loaning = slows down economic activity. The real question remains: how will employment and the overall economy change when the Fed starts to normalize interest rates and reduce the securities holdings from QE on its balance sheet. In theory it should reduce the rate of job creation. More info on normalization here: https://www.federalreserve.gov/monetarypolicy/policy-normalization.htm https://www.federalreserve.gov/monetarypolicy/policy-normali...