Regional Fed chairman open to keeping interest rates at current levels in June: newspaper By Reuters

2023-05-21 18:25:37

© Reuters. FILE PHOTO: Minneapolis Fed President Neel Kashkari speaks during an interview with Reuters in New York, Feb. 17, 2016. REUTERS/Brendan McDermid/File photo

By Juby Babu

(Reuters) – Minneapolis Fed President Neel Kashkari said he may support keeping interest rates unchanged at the central bank’s next meeting in June to give financial policymakers more time to assess the effects of past rate hikes and the inflation outlook, reported the Wall Street Journal on Sunday.

“I am open to the idea that we can move a little slower from now on,” Kashkari was quoted as saying by the newspaper in an interview conducted on Friday and published on Sunday.

However, Kashkari, who is a member of the US central bank’s monetary policy committee, warned that his decision was not yet made: “I would oppose any kind of statement that we are done (the rate hike cycle)” .

To tackle persistently high inflation in the wake of the Covid-19 pandemic, the U.S. central bank raised rates sharply last year, including a 25bp hike adopted earlier this month, raising benchmark rates to a range from 5% to 5.25%, the highest level since before the 2008 financial meltdown.

While inflation has shown signs of moderating since 2022, it remains well above the Fed’s 2% target. The Fed has faced calls not to tighten rates further to lessen the risk of pushing the US economy into recession.