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Fed may not be able to engineer higher inflation -Kashkari


Reuters


SANTA BARBARA, Calif., May 16 (Reuters) - The Federal Reserve should not cut interest rates unless there is hard data signaling economic weakness ahead, Minneapolis Fed President Neel Kashkari said on Thursday, and should not rely on a rate cut to try to kickstart a healthier level of inflation.

"I am not sure that cutting rates would do much to inflation expectations," Kashkari told reporters after giving a talk in Santa Barbara, California. "It might take some surprise, that maybe wage growth all of a sudden does pick up, and then that leads to high inflation, and then importantly we shouldn't respond very much, to allow that to go above target."

He added, "I don't think it's completely in our control getting inflation back to 2%."

"We can always raise rates" if wages, and inflation, start to rise too fast, he said.






This article appears in: Fundamental Analysis , Stocks , World Markets , Economy , 401k , Retirement




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