Neel Kashkari, president of the Federal Reserve's Minneapolis, Minnesota, location, recently said that the time is not right to cut interest rates.
In a Wall Street Journal report, the Indian American executive, considered one of the Fed's most consistent opponents of interest-rate increases, has said it’s not the right time for the central bank to cut borrowing costs.
For now, the Journal said in its report, Kashkari believes the U.S. central bank is in the right place. He spoke in the wake of the Fed’s recent decision to hold rates steady and signal it is unlikely to raise them this year.
He and other Fed officials have cited recent weak U.S. economic data, including soft inflation and slowing global growth as reasons to hold off on more rate increases for a while as they assess the health of the expansion, according to the report.
"Some of the risks have shifted to the downside, so pausing to get more information, to see if this really is an economic slowdown or if it’s just a blip, I think that’s the right move... [I] think economic weakness has caused the rest of the [Fed’s rate-setting] committee to say it’s an appropriate time to pause, and I support that," Kashkari told the publication.
Kashkari has long said he saw no reason to raise rates because inflation has run below the Fed’s 2 percent target almost continuously for several years. He added the Fed could easily raise rates if it did see price pressures pick up too much.
Until recently, his opposition to rate rises was shared only with St. Louis Fed president James Bullard. But now their position is common among their colleagues, the report said.