Fed’s Kashkari open to holding rates steady in June, WSJ reports

FILE PHOTO: Minneapolis Fed President Neel Kashkari speaks during an interview at Reuters in New York

(Reuters) – Minneapolis Fed President Neel Kashkari said that he could support holding interest rates steady at the central bank’s next meeting in June to give officials more time to assess the effects of past rate increases and the inflation outlook, the Wall Street Journal said on Sunday.

“I’m open to the idea that we can move a little bit more slowly from here,” the newspaper quoted Kashkari as saying in a Friday interview that was published on Sunday.

However Kashkari, a member of the central bank’s rate-setting monetary policy committee, cautioned that his mind was not yet made up: “I would object to any kind of declaration that we’re done.”

To contend with stubbornly high inflation following the COVID-19 pandemic, the U.S. central bank has raised sharply over the past year, including a 25-basis-point bump adopted earlier this month, bringing benchmark lending rates to a range of 5%- 5.25%, the highest level since before the 2008 financial meltdown.

While inflation has shown signs of moderating since the summer of 2022, it remains well above the Fed’s 2% target. The Fed has faced calls to refrain from further tightening to lessen the risk of driving the U.S. economy into recession.

(Reporting by Juby Babu in Bengaluru; Editing by Lisa Shumaker and Bill Berkrot)