The Federal Reserve needs to wait for more significant progress in inflation before considering an interest rate cut, Minneapolis Federal Reserve President Neel Kashkari said on Tuesday.
When asked about the conditions for a rate cut in 2024, Kashkari said, "We need more months of positive inflation data to give confidence that it is appropriate to cut rates."
The Fed official also did not rule out the possibility of further rate hikes if inflation continues, saying that the central bank should not rule out anything at this time.
US inflation rose 0.3% in April, slightly less than expected, offering some relief to policymakers, but it was still 3.4% higher than a year earlier.
Kashkari remains confident that the Fed will eventually reach its 2% inflation target but stressed the importance of patience for now.
"I don't see the need to rush and do a rate reduction, I think we need to take our time and do it right," he said in the interview.
He also mentioned that while the central bank is considering adjusting the target rate in the future, it is premature to "change the target" at this time.
Earlier this month, Kashkari suggested that the Fed may need to keep interest rates steady for an "extended period" to achieve its inflation goals.
Recently, there has been a growing divergence among major central banks on interest rate policy.
The European Central Bank is expected to cut rates ahead of the Fed, with key ECB officials backing a rate cut in June. Likewise, the Bank of England is expected to cut rates this summer.
