Fed may need to hold rates steady all year, Kashkari says

Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said he believes the U.S. central bank will need to keep interest rates where they are for an “extended period,” and possibly all of this year, to bring inflation down to the Fed’s 2% goal.

The bar for a rate hike is high, he said, though “not infinite” and cannot be ruled out, Kashkari said at the Milken Institute conference; more likely, he said, the economy will go “sideways” for a while.

In March he thought the Fed would need to deliver two rate cuts this year, he said, and by next month he may mark that forecast down to just one cut or even no cuts, depending on the data. Kashkari said it would take “multiple” monthly cooler inflation readings or a “marked” weakening in the job market for him to support a rate cut.
Source: Reuters (Reporting by Ann Saphir)