Kashkari Advocates Steady Interest Rates Amid Tariff Uncertainty

Federal Reserve Bank of Minneapolis President Neel Kashkari has urged the central bank to keep interest rates steady in light of ongoing uncertainties arising from the Trump administration's tariffs. Speaking in Tokyo, Kashkari warned against quickly dismissing the influence of these tariffs on inflation, highlighting the complexities of the current economic environment.

As part of a broader debate within the Federal Reserve, some policymakers support looking past tariff-related price increases to foster economic growth through rate cuts. However, Kashkari insists that trade negotiations may extend over years, potentially increasing tariffs further and impacting the economy.

Despite inflation exceeding targets for four years, Kashkari argues for a cautious approach to interest rates. The Fed has maintained stability with an unchanged policy rate since December, aiming to balance the need to defend inflation expectations against the unpredictable nature of trade policies and their economic repercussions.

(With inputs from agencies.)