Investing.com -- The President of the Minneapolis Federal Reserve Bank, Neel Kashkari, emphasized on Tuesday the importance of the Federal Reserve’s monetary policy independence for improving economic outcomes. His remarks were made in response to President Donald Trump’s criticism of Fed Chair Jerome Powell for not reducing interest rates.

Speaking at the U.S. Chamber of Commerce Global Summit in Washington, D.C., Kashkari indicated that it was premature to determine the appropriate trajectory for interest rates. He also pointed out that the recent increase in Treasury yields and a weakening dollar suggest that some investors are reconsidering their investments in the United States. He added that a decrease in capital flows could potentially result in higher interest rates in the U.S.

Kashkari further commented on various economic aspects during a Q&A session. He acknowledged that tariffs can be somewhat inflationary and emphasized the importance of keeping inflation expectations anchored. He noted that long-term inflation expectations still appear to be steady.

In addition, Kashkari highlighted the significance of immigration dynamics for long-term growth and stated that there is no evidence of widespread layoffs. He also mentioned that federal job cuts are not causing a significant impact on the economy. Lastly, he pointed out that the sharpest drop in confidence has been observed since March 2020.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.