MNI BRIEF: Kashkari Says Fed Can Be Patient With Rate Cut
Minneapolis Federal Reserve President Neel Kashkari said Monday that the FOMC can be patient with loosening monetary policy in part because the neutral interest rate may be higher than thought, in comments which put an official who at times has expressed some off-consensus views more in line with Chair Jerome Powell.
"It is possible, at least during the post-pandemic recovery period, that the policy stance that represents neutral has increased. The implication of this is that, I believe, it gives the FOMC time to assess upcoming economic data before starting to lower the federal funds rate, with less risk that too-tight policy is going to derail the economic recovery," Kashkari wrote in an essay. (See MNI INTERVIEW: US Manufacturing Nearing Growth Phase, ISM Says) Mixed economic data of late "lead me to question how much downward pressure monetary policy is currently placing on demand" he wrote.