November 6, 2019 / 12:26 AM / 6 days ago

Fed's Kashkari says U.S. rates are modestly accommodative

FILE PHOTO: Minneapolis Fed President Neel Kashkari speaks during an interview at Reuters in New York, United States on February 17, 2016. REUTERS/Brendan McDermid

(Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said he believes U.S. monetary policy is now “modestly accommodative,” a view that puts him on the same page as most of his colleagues at the U.S. central bank.

The Fed last week cut its target for the overnight bank-to-bank lending rate for the third time this year, to a range of 1.5%-1.75%.

While that’s low by historical standards, the neutral rate that allows a healthy economy to grow without overheating has fallen, making the current low level of rates less stimulative than it would have been in the past, Kashkari said.

“Are interest rates low relative to neutral? No,” he said.

Reporting by Ann Saphir; Editing by Himani Sarkar

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