With inflation low and wages there is little sign of an upward wave, the US Central Bank should not increase interest rates, Minneapolis Fed President Neel Kashkari said on Tuesday.
“What’s the hurry?” Kashkari asked, at an event at the Michigan Technological University in Houghton, Michigan to add that neither wages nor inflation data, signs of overheating in the economy and in fact may suggest that there is still some slack in the labour market.
The Fed raised rates twice this year, including earlier this month, and Kashkari both times.
He does not agree with the Fed chair Janet Yellen, who sees unemployment at a 16-year low, and projects inflation will inevitably move in the direction of the Fed’s 2 percent target. Yellen says that the Fed needs to increase interest rates to prevent inflation from overshooting.
To persuade although Kashkari failed, his colleagues in June, they should leave prices alone, he continues to make his case for him. On Tuesday, he repeated his view that with the slowdown in inflation in the last few months, “I don’t see what we’re so worried.”
“Why do we try to cool down the economy, if it can still be a little play in the labour market, and there is still some room on the inflation?”, he said. “We are not seeing wages rise very quickly, and we don’t see the inflation. This tells me that the economy is on the verge of overheating.”