After Donald Trump said on Monday that Federal Reserve Chair Janet Yellen was keeping interest rates low because of political pressure from the Obama administration, Minneapolis Fed President Neel Kashkari said that was definitely not the case.
In policy deliberations at the U.S. central bank, “politics does not play a part, I can assure you of that,” Kashkari said in an interview on CNBC.
Kashkari also said low U.S. inflation and a recent jobs report that suggests the economy continues to “muddle along” means there is little urgency to raise interest rates.
“There doesn’t appear to be a huge urgency to do anything, frankly, unless—get as much data as we can and let’s try to get our inflation back up,” he told CNBC,
The Fed meets next week to decide whether to raise rates from their current range of 0.25% to 0.5%. Traders are largely betting against it, although some Fed officials including Atlanta Fed chief Dennis Lockhart have said the option should be seriously discussed.
Kashkari, who rotates into a voting spot on the policy-setting panel next year, said he watches inflation closely and wanted to see more upward movement in core measures of inflation.
He said his overall outlook was for moderate economic growth, and while he views low growth as due largely to factors that cannot be affected by monetary policy, he said he saw as “curious” the suggestion that raising rates could somehow lift inflation.