(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said interest-rate cuts may not be needed this year if progress on inflation stalls, especially if the economy remains robust.
“In March I had jotted down two rate cuts this year if inflation continues to fall back towards our 2% target,” Kashkari said in a virtual event on Thursday. “If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all.”
He called the January and February inflation readings “a little bit concerning,” and said he needs to see more progress on prices to gain confidence that they're moving toward the Fed's 2% target before lowering borrowing costs. He emphasized the importance of letting inflation data guide interest-rate decisions.
Kashkari, who doesn't vote on monetary policy this year, floated the idea of potentially not needing to cut at an event last month. At the time, he said, “If we have a run rate that's very attractive, people have jobs, businesses are doing well, inflation is coming back down, why do anything?”
The event, broadcast on LinkedIn, was hosted by news outlet Pensions & Investments.
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