Kashkari says yield curve shows Fed may have gone too far

March 29, 2019

NEW YORK (Reuters) – Minneapolis Federal Reserve Bank President Neel Kashkari said on Friday that the yield curve, which inverted earlier this week, is an important signal that may be signaling the Fed has tightened policy too far.

In an interview on Fox Business Network, Kashkari said that while he opposed the Fed’s recent rate increases, a recession for the United States is not his base case this year, though the risks are elevated. “A big question mark that we wrestle with is what interest rate represents neutral… I do think it’s giving us feedback on where neutral is. Have we gone above neutral? I still don’t think we have but it’s certainly possible and I don’t think we should be at a contractionary stance.”

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)

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