Federal Reserve officials have not discussed what it would take to cut interest rates, Minneapolis Fed President Neel Kashkari said Tuesday.
Asked in an interview on Bloomberg about “a feeling in the market” that the bar to cut interest rates was not as high now as it was previously, Kashkari replied: “I have no idea where market participants are getting that. There’s no discussion amongst me and any of my colleagues about when we’re going to start preparing to cut rates.”
He said officials have discussed that, when inflation “is well on its way back down,” if the Fed didn’t cut rates, then, adjusted for inflation, monetary policy would be more and more of a drag on growth.
“That’s real. That’s math,” he said.
Kashkari said the Fed would let the data guide the central bank on whether more rate hikes were needed.
“The economy will tell us how much is needed to get” to 2%, he said.
“So if you saw inflation tick back up, and you saw continued very strong economic activity on the real side of the economy, that would tell me ‘okay, we might need to do more’. So it’s hard for me to say this one data point needs to be here. I will be looking at the suite of data,” he said.
The Minneapolis Fed President, who is a voting member of the Fed’s interest-rate committee, said the job to bring inflation down to 2% target was “not done yet.”
“If we need to do more, we will,” he said.
Stocks
DJIA
SPX
were set to open lower on Tuesday while the 10-year Treasury yield
BX:TMUBMUSD10Y
slipped to 4.64% in early trading.
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