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Weak US growth has stoked income gaps: Fed's Kashkari

Neel Kashkari
David Paul Morris | Bloomberg | Getty Images

The U.S. economy's sub-par economic growth has exacerbated income gaps between the country's racial groups, a top Federal Reserve official said on Wednesday, adding that better education for Native Americans in particular would boost productivity and output.

In a brief speech that did not mention interest rates, Minneapolis Fed President Neel Kashkari tied what he called his personal belief that education is society's "great equalizer" with the central bank's desire for stronger economic growth.

"Growth since the Great Recession has been steady but stubbornly slow, leaving output well below expectations (and has) contributed to exacerbating the persistent and wide gaps in income among our country's racial and ethnic groups," Kashkari, who has a vote on policy next year, said in prepared remarks.

"Education has the potential to address two big issues confronting the nation, as well as Indian Country: economic growth and economic inequality," he added at a workshop on early childhood development in Indian Country.

Other Fed officials in recent years have not shied away from discussing the big income and wealth gaps in the economy, which grew at a weak 1.4 percent rate in the second quarter.

Kashkari cited Minnesota education data showing that 44 percent of Native American children "arrive at kindergarten fully ready to learn," compared to 57 percent of blacks and 63 percent of whites.