No Sign of Rising Inflation, says Minneapolis Fed President

Federal Bank of Minneapolis’ President Neel Kashkari who disagreed on the rate hikes that happened this year, showed hints again about his possible opposition to the Fed regarding the expected December rate increase.

The American banker and politician spoke via Minneapolis Fed’s website during the Town Hall event held at Winona State University in Minnesota and said that the inflation is low which he believes that there is no evidence to “tap the breaks” on the US economy. Hence, the raise of interest rates could possibly slow down the economy due to decline in incentives, particularly on borrowing, hiring, and investment.

Jobless rate came in at 4.1 percent in October and projected to lower down further this year. However, inflation for this year has softened amid the decline in unemployment rate. While the lackluster growth of wages indicates that the labor market remains dormant.

The perspective of Kashkari is far different from the majority of the Fed Reserve banks. Since most of the Fed branches are concerned about the absence of rate hike due to the possibility of the market to overheat. On one side, Dallas Fed President Robert Kaplan who voted an approval for the policy this year, stated earlier on Monday that the increase is suitable for the economy's future.