Fed's Kashkari wants to see 'many more months' of good inflation data before cutting rates

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Minneapolis Federal Reserve President Neel Kashkari said Tuesday that central bank policymakers should wait for significant progress on inflation before they start to cut interest rates. 

Asked during an interview with CNBC what conditions are needed for the Fed to reduce rates this year, Kashkari said: «Many more months of positive inflation data, I think, to give me confidence that it’s appropriate to dial back.»

He even suggested the central bank could hike rates if inflation fails to come down further, saying «I don’t think we should rule anything out at this point.» 

Kashkari is not a voting member of the 12-person Federal Open Market Committee this year, although he still attends meetings, participates in discussions and contributes his perspective to the proceedings. He will rotate in again as a voting member in 2026.

FED MEETING MINUTES SHOW SOME 'WILLINGNESS' TO HIKE RATES AGAIN

Minneapolis Federal Reserve Bank President Neel Kashkari visits «Maria Bartiromo's Wall Street» at FOX Business on Oct. 11, 2019, in New York City. ((Photo by Roy Rochlin/Getty Images) / Getty Images)

Officials voted at their most recent meeting in May to hold interest rates steady at a range of 5.25% to 5.5%, the highest level since 2001. Although policymakers left the door open to rate cuts later this year in their post-meeting statement, they also stressed the need for «greater confidence» that inflation is coming down before easing policy. 

Since then, there has been some evidence that inflation is starting to ease again, albeit slowly. The April consumer price index showed that inflation cooled slightly to