Neel Kashkari of the US Fed says it is ‘far too early’ to cut interest rates

Minneapolis Federal Reserve President Neel Kashkari declined to cut rates last month and sees no need to cut them in the near term given the resilience of the labor market and inflation above the Fed’s target, the New York Times reported Wednesday.“I don’t see any impetus to cut in January,” Kashkari said in an interview with the newspaper, adding that it was “way too early” for a rate cut, which could be possible later this year.

Kashkari told the New York Times that he took some comfort that lawmakers from both political parties have expressed support for an independent Fed and for Fed Chairman Jerome Powell.

The Trump administration has subpoenaed Powell over comments he made in Congress last summer in what the Fed chairman said was an effort to intimidate the central bank into cutting rates.

The Fed is widely expected to leave its policy rate within the current range of 3.50%-3.75% at its meeting in two weeks, after cutting it by 75 basis points through 2025, including a quarter-percentage-point cut approved by a 9-3 vote at the December meeting.

Kashkari, who has a vote on this year’s interest rate panel, indicated he could support a rate cut later this year if unemployment, which stood at 4.4% in December, rises, especially if inflation also declines.

But for now, he said, inflation, which has been above the Fed’s 2% target for years and could remain there for another two or three years, is “very concerning,” the paper said.

A government report Tuesday showed that consumer prices rose 2.7% last month from a year earlier.