Minneapolis Fed President Kashkari: We Must Stay Awake

Minneapolis Fed President Neel Kashkari said rates should remain at their current levels until they know where inflation is headed. Minneapolis Fed President Neel Kashkari reiterated that the central bank is likely to keep rates at their current levels “for some time,” and questioned how restrictive monetary policy is right now. “The biggest uncertainty in my mind is how much downward pressure monetary policy puts on the economy. That’s unknown; we don’t know for sure. That tells me we probably need to hold out here for a while until we know where underlying inflation is headed before we jump to any conclusions,” Kashkari said at an event in North Dakota on Wednesday. The Minneapolis Fed president said last week that the central bank would likely keep interest rates where they are “for an extended period of time.” Policymakers have held interest rates at their current levels, a 23-year high, since July. Fed officials have pushed back on expectations of a first rate cut, stressing that borrowing costs need to be kept high for longer in the face of disappointing inflation figures. New data released on Wednesday showed that price growth excluding food and energy slowed for the first time in six months in April.