June 21, 2019 / 2:09 PM / 4 months ago

Fed's Kashkari calls for 50 basis point cut in U.S. rates

FILE PHOTO: President of the Federal Reserve Bank on Minneapolis Neel Kashkari speaks during an interview in New York, U.S., March 29, 2019. REUTERS/Shannon Stapleton/File Photo

(Reuters) - The Federal Reserve should cut interest rates by half a percentage point, Minneapolis Fed President Neel Kashkari said on Friday, adding that aggressive action is needed now to re-anchor inflation expectations that have dropped below the Fed’s 2% target

“I believe the FOMC should take strong action to re-anchor inflation expectations at our 2 percent target and support strong job growth, higher wage growth, and sustained economic expansion,” Kashkari said in an essay distributed Friday. “The best way I can think of to do that is for the Committee to cut rates by 50 basis points and then commit to not raising rates until core inflation returns to our target on a sustained basis.”

Kashkari does not vote on monetary policy this year.

Reporting by Ann Saphir; Editing by Chizu Nomiyama

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