Minneapolis Fed President Neel Kashkari is signaling that he is open to potentially pausing the Federal Reserve’s interest-rate hikes aimed at tamping down inflation when the central bank meets next month, according to a report by the Wall Street Journal.
Kashkari, who is currently a voting member of the Federal Open Market Committee that determines monetary policy moves, told the Journal in an interview Friday, “I’m open to the idea that we can move a little bit more slowly from here.”
“I would object to any kind of declaration that we’re done. If the committee chooses to skip a meeting because we want to get more information, I could make the argument why that makes sense,” Kashkari told the Journal. “A skip to get more information is very different in my mind than [saying], ‘Hey, we think we’re done.’”
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Kashkari, who has become more hawkish on interest rates over the last year amid the Fed’s fight with inflation, noted in the interview that while inflation “does seem to be coming down” it has remained persistently higher than the Fed has anticipated in the face of the rate hikes.
“It is at least not getting worse. And then you add in the uncertainties about the banking sector, are the stresses really behind us? And are there more stresses yet to emerge? I think that does give us some reason to say, ‘Hey, let’s go a little bit slower.’”
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Following its most recent meeting earlier this month, the Fed raised the benchmark federal funds rate for the 10th consecutive time. The May rate hike of 25 basis points brought the federal funds rate to a range of 5% to 5.25%, the highest level since August 2007.
Fed Chair Jerome Powell indicated in a press conference after the meeting, “A decision on a pause was not made today.” However, Powell emphasized, “We’re no longer saying that we ‘anticipate,’” and reiterated that the Fed’s future policy decisions will “be driven by incoming data, meeting to meeting.”
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Critics have taken issue with the Fed’s policy decisions, arguing that they’ve hurt the economy. Billionaire Elon Musk said in an interview with CNBC last week that the Fed was too slow to raise interest rates and will be too slow to cut interest rates as economic conditions cool off.
“My concern with the way the Federal Reserve is making decisions is they’re just operating with too much latency,” Musk said. “Basically, the data is somewhat stale. The Federal Reserve was slow to raise interest rates, and now I think they’re going to be slow to lower them.”