Minneapolis Fed President Neel Kashkari on Trump and Inflation

WASHINGTON (Reuters) – Minneapolis Federal Reserve President Neel Kashkari stated he is unconcerned about potential conflicts between the Fed and President-elect Donald Trump, as both main U.S. political parties aim to lower inflation.

Kashkari expressed confidence in Washington's dynamics following Trump's election in an interview on Fox News. He mentioned, "Both sides of the aisle want us to keep the economy strong and get inflation down."

After the Fed's recent decision to cut the benchmark interest rate by 0.25% to a range of 4.5% to 4.75%, Kashkari emphasized progress made and the importance of continuing to address economic challenges.

While not indicating a stance on further rate reductions at the December meeting, he highlighted that robust growth and productivity gains might necessitate higher rates than anticipated.

Kashkari remarked on the unexpected resilience of the economy, suggesting that continued strength could influence future rate decisions.

The implications of Trump's election included the possibility of renewed tensions between him and Fed Chair Jerome Powell concerning interest rate policies, especially given Trump's prior calls for lower rates.

Kashkari expressed confidence in existing structures that guide the Fed's economic responsibilities, emphasizing a common desire among all parties to reduce inflation and maintain a strong labor market.