WASHINGTON (Reuters) - The U.S. Federal Reserve should keep interest rates low so that wage gains accelerate and inflation rises, Minneapolis Federal Reserve President Neel Kashkari said on Tuesday.
“Inflation has been low, wage growth has been low, so I’m advocating for lower interest rates to get wages up and to get inflation back to our 2 percent target,” Kashkari said at an event in Minnesota. Kashkari has repeatedly said he wants to see inflation rise before increasing interest rates any further.
Kashkari does not have a vote on the Fed’s rate-setting committee this year, but did have in 2017 during which he dissented against the central bank’s decision to raise borrowing costs three times.
The Fed raised interest rates at its last policy meeting in December and forecasts another three hikes this year. A strengthening economy and 17-year low in the unemployment rate have so far outweighed chronically weak inflation in the minds of most policymakers as the Fed seeks to keep the nation’s economy on an even keel.
Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama