Fed has room to cut interest rates gently, Kashkari says

By Michael S. Derby

Minneapolis Federal Reserve President Neel Kashkari said on Wednesday that the U.S. central bank has some room to cut its short-term interest rate target, though he did not say when a policy easing needs to happen.

"I'm not forecasting a recession," Kashkari said before a gathering of the Minnesota Women's Economic Roundtable. "I have every reason to believe the cooling that we're seeing will probably continue and it will be somewhat gentle."

With the neutral federal funds rate around 3%, Kashkari said it "suggests that interest rates have some room to come down gently over the next couple of years."