Fed's Kashkari: Glad Fed is pausing

Author: Greg Michalowski | Category: Central Banks

Fed's Kashkari in an interview with Reuters

Neil Kashkari, president of the Minneapolis Fed

Fed's Kashkari in an interview with Reuters (dove/non-voting) says:
  • He is glad that the Fed is pausing, sees no reason to raise rates
  • he would support a rate cut if he reached the conclusion that the US economy is really slowing
  • he would need a few months of data before deciding if a rate cut is needed
  • it is possible policy has become contractionary
  • there is a cost of Fed's policy.
  • Balance of risks shifted for his colleagues and for himself
  • recession probability has increased but still not his baseline
  • holding wide range of treasury maturities may avoid criticism that the Fed is subsidizing US government borrowing
  • he is open-minded to changing Feds long-run strategy, but 1st needs to meet existing inflation target

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