WASHINGTON (WS News) – Minneapolis Federal Reserve President Neel Kashkari said he was not concerned about a potential clash between the Fed and President-elect Donald Trump because both major US political parties want inflation lower.
“I am not concerned about the dynamics in Washington,” following Tuesday’s election of Trump, Kashkari said in an interview on Fox News. “Both sides of the aisle want us to keep the economy strong and get inflation down.”
“We have made a lot of progress and we want to get the job done,” said Kashkari, the first Fed policymaker to speak publicly following the central bank’s decision last week to cut the benchmark interest rate by a quarter of a percentage point to a range from 4.5% to 4.75%.
Kashkari did not express a view on further rate reductions as soon as the Fed’s December meeting but noted that recent strong growth and productivity gains might point to the need for higher interest rates than otherwise.
“I have been surprised at how resilient the economy has been,” Kashkari said. “If that is sustained and we are in a structurally more productive economy going forward, that tells me we wouldn’t end up cutting as far.”
Trump’s election raised the prospect he would renew the spat he had with Fed chair Jerome Powell over interest rate policy in his initial term when the president wanted lower interest rates.
But the emphasis has shifted since then to completing the battle against inflation, an issue that was central to Trump’s campaign.
“I have a lot of confidence in the structures in place that force us and focus us on doing our economic jobs,” Kashkari said. “Everybody wants inflation back down and a strong labor market.”
