U.S. Economy Best Served by Independent Federal Reserve, Fed

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Dow Jones NewsJan 14, 7:37 PM UTC
U.S. Economy Best Served by Independent Federal Reserve, Fed's Kashkari Says

By Jessica Coacci

The U.S. economy is best served by having an independent Federal Reserve that executes monetary-policy decisions based only on data and analysis, Minneapolis Fed President Neel Kashkari said in a virtual conversation with the Wisconsin Bankers Association.

 

With a new Fed chair on the horizon, and increased pressure on the committee after it received subpoenas from the Justice Department late last week relating to Chair Jerome Powell's testimony about renovations of the central bank's headquarters in Washington, Kashkari said Wednesday that the Fed's policy committee is focused on its economic goals as it deals with a complex scenario of a cooling labor market and inflation that has remained above its 2% target.

 

"We're doing our best to make the best judgments we can, but keeping politics out of it," he said. "I feel very confident that the committee will continue to make the best decisions we can, based on data and analysis, to achieve the dual mandate that Congress has charged us to try to achieve," he added.

 

Kashkari will rotate in as a voting member of the Federal Open Market Committee this year when officials decide on where to set interest rates at the end of January after three consecutive quarter-point cuts through the end of December. Ahead of the meeting, Kashkari said any future rate decisions would depend on incoming data and which side of the central bank's dual mandate poses a bigger risk to the economy.

 

"We have a labor market that is showing some signs of weakness," he said. "Inflation is still too high, but it is trending, at least, in the right direction," he added.

 

Last week, the Labor Department reported that the unemployment rate ticked down to 4.4%, although it crept higher in 2025.

 

On CNBC last week, Kashkari said rates were pretty close to neutral right now--a level that doesn't slow down or stimulate the economy. He also expressed skepticism toward recent inflation data that showed consumer prices rose 2.7% in November from a year earlier, citing issues with the data collection from the prolonged government shutdown that lasted until mid November.

 

"It's going to take a few more months until the data is fully clean again," he said Wednesday.

Write to Jessica Coacci at [e-mail]

(END) Dow Jones Newswires

 

January 14, 2026 14:37 ET (19:37 GMT)

 
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