Economics
Kashkari Says Fed May Have Harmed Economy With Rate Hikes
- Fed tightening may explain low inflation, Kashkari says
- FOMC dissenter calls rate increases "premature" and "not free"
Fed's Kashkari Asks If Rate Hikes Are Harmful
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Federal Reserve interest-rate increases may be “doing real harm” to the U.S. economy, which would help explain why inflation is low and job growth has slowed, said Minneapolis Fed President Neel Kashkari, one of the central bank’s most dovish policy makers.
“It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations,” Kashkari said Tuesday during a talk at the University of Minnesota in Minneapolis. “These premature rate hikes that we are embarking on, they’re not free, and I think we need to remind ourselves of that.”