Fed’s Kashkari Says Powell ‘Coming Around’ to Wait-and-See View By Bloomberg

© Bloomberg. Neel Kashkari Photographer: Andrew Harrer/Bloomberg

(Bloomberg) — Federal Reserve Bank of Minneapolis President Neel Kashkari said Fed Chairman Jerome Powell is “coming around” to the view to wait until wages and inflation rise before raising interest rates again, and that the Fed’s latest pause will help keep a “fundamentally healthy” economy on track.

“There are more people out there who want to work; let’s let the economy continue to strengthen and if we see signs then, wages pick up, inflation picks up, we can always tap the brakes,” Kashkari said Sunday at an event hosted by the Trinity Lutheran Church in Long Lake, Minnesota. “Let’s just not tap the brakes prematurely.”

The Minneapolis Fed distributed a recording of the event, which took place Sunday morning.

“I think we still have room to run in the U.S. economy,” he said. Kashkari is not a voter this year on the policy-setting Federal Open Market Committee.

The FOMC pivoted decisively on Jan. 30 to a prolonged pause on interest-rate increases, declaring it would be “patient” as it determines future adjustments in borrowing costs that left open the possibility the next move could be a cut.

The policy U-turn just six weeks after the Fed raised rates and signaled two hikes in 2019 reflected concern that slower global growth, tighter financial conditions and uncertainty over U.S.-China trade talks and Brexit posed risks to the central bank’s positive U.S. economic outlook.

January payroll data released by the Labor Department on Friday showed U.S. employers added the most jobs in almost a year while wage gains remained measured. Average hourly earnings advanced 0.1 percent from the prior month while unemployment rose slightly to 4 percent, pushed up by the government shutdown.

The Fed aims for maximum sustainable employment with stable prices, which it defines as 2 percent, according to its preferred gauge. This rose 1.8 percent in the 12 months through November.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *