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Fed's Kashkari to Back Rate Cut, But Does Not Expect Recession

Fed's Kashkari to Back Rate Cut, But Does Not Expect Recession
Minneapolis Federal Reserve president Neel Kashkari participates in the Yahoo Finance All Markets Summit at Union West on Thursday, Oct. 10, 2019, in New York. (Photo by Evan Agostini/Invision/AP)

Thursday, 10 October 2019 09:00 PM

 Minneapolis Federal Reserve Bank President Neel Kashkari on Thursday said he did not expect the U.S. economy to enter recession but would support another rate cut.

"My base-case scenario is still growth, I'm not forecasting recession, but the risks to the downside are increasing," Kashkari told the Wall Street Journal in an interview.

"If the data continues to come in the way it has, I'm going to be supportive of another rate cut."

Kashkari does not have a vote on monetary policy this year but participates in policy discussions at the U.S. central bank.

He had said on Tuesday that the Fed is having a hard time estimating the effects of trade wars such as the ongoing U.S.-China dispute on the U.S. economy, as Federal Reserve Chair Jerome Powell flagged openness to further rate cuts to fend off global economic risks.

The Fed's September rate cut, to a target range of 1.75% to 2.00%, drew three dissents out of 10 votes, two from policymakers who believed the Fed should not ease policy at all, and one from St. Louis Fed President James Bullard who wanted a bigger, half-point interest-rate cut.

Among the seven non-voting policymakers, at least a couple also disagreed with the move, including Kashkari who had sided with Bullard. 

© 2019 Thomson/Reuters. All rights reserved.

   
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Economy
Minneapolis Federal Reserve Bank President Neel Kashkari on Thursday said he did not expect the U.S. economy to enter recession but would support another rate cut.
kashkari, fed, rate, cut, likely, journal
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2019-00-10
Thursday, 10 October 2019 09:00 PM
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