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Home / Business / Neel Kashkari defends Fed independence as Trump pressure increases – Axios

Neel Kashkari defends Fed independence as Trump pressure increases – Axios



"The louder the policy becomes, the more we gather data and analysis," says Kashkari, whose demands for lesser interest began when Trump took office, Axios said.

Between the lines: The attitude of the Fed The monetary policy concludes: Interest rates were raised about a year ago. In July, it announced the first key rate cut since the financial crisis to maintain record economic growth as risk – Trump's trade war – threatens economic growth.

  • Businesses have regressed their spending in the face of the crisis, and the pace of recruitment has slowed.
  • "People are nervous where [trade is] they will go, especially evident for exporters or global companies," says Kashkari, who will vote next year in the rotating monetary committee.
  • "If all are ghosting, that may be enough to overthrow the economy."

Whether the Fed cut interest rate cuts could provide cover for Trump to spur on trade warfare – a topic by a Kashkari who has been much controversial by former New York Fed President Bill Dudley that inflation, which is below its 2% target, is also an important factor in the Fed's move.

Suppose we have inflation well above target and we are worried that inflation expectations will rise. I think then we would say a lot less: "Well, we will try to cut interest rates because of the trade war. & # 39; … Beyond the cause, if you look at just that data, that data would mean that you want a more accommodative monetary policy.

– Neel Kashkari, President of the Minneapolis Fed

The Big Picture: The Fed listens to leaders and community activists in a series of unprecedented "listening sessions" across the country. The events have, as Chairman Jerome Powell has repeatedly emphasized, convinced the Fed that it is important to continue the recovery for communities that are still recovering from the financial crisis.

  • "The conventional wisdom was that monetary policy plays no role in the distribution results. We have now learned that monetary policy is the biggest factor because we need to create the context for all these different groups to be able to participate in the economy, "says Kashkari Axios.

What Next: Although he has no say at the Fed meeting this month, Kashkari would vote by a majority.

  • I'll probably be in favor of cutting interest rates in October, "he tells Axios. But I do not know how deep we have to go – it will really depend on how the data comes out. "[19659013]
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