WASHINGTON (Reuters) – Minneapolis Federal Reserve Bank President Neel Kashkari said on Friday that there is no sign of rising inflation and that the U.S. central bank should hold off on raising interest rates until that changes.
“There’s a nervousness that if all of the sudden the labor market tightens more quickly than we’re anticipating…that all of a sudden inflation is much higher than we were expecting and we would then have to raise rates aggressively,” Kashkari said at a housing and finance event in Washington. “My rebuttal is we are seeing zero evidence of that in any of the data and I think we should let the data guide us.”
The Fed unanimously decided to keep interest rates unchanged on Wednesday but emphasized solid economic growth in a sign it remains on track to lift borrowing costs in December for what would be the third time this year.
Kashkari, who is a voter on this year’s rate-setting committee, has repeatedly said the Fed should wait to raise borrowing costs again until inflation hits its 2-percent goal.
Kashkari also said he does not expect any major differences to how monetary policy is decided when Fed Governor Jerome Powell succeeds Chair Janet Yellen as leader of the Fed next year.
“I think he’s a very serious, thoughtful policymaker so I am not anticipating the transition from chair Yellen to chair Powell will lead to a big change in the way we do monetary policy,” Kashkari said.
(Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)