INSUBCONTINENT EXCLUSIVE:
The Federal Reserve's decision to stop raising interest rates puts a "fundamentally healthy" US economy on track to further growth,
Minneapolis Federal Reserve Bank President Neel Kashkari suggested on Sunday.
"I think we still have room to run in the US economy,"
Kashkari said at a town hall at a church in Long Lake, Minnesota.
"The US economy is fundamentally healthy," he added
The event was closed, but an audio recording was distributed afterwards.
"We at the Fed cannot control if Europe has a crisis, or if China
has a hard landing, but we can control our own mistakes; so if we can avoid tapping the brakes prematurely, I think the expansion can
continue."
Last week, the Fed discarded a promise to keep raising rates, and instead pledged patience on further policy change
The dovish shift was cheered by financial markets, but sounded to some analysts like a warning of economic weakness ahead.
The decision also
appeared to deliver President Donald Trump what he had been demanding in tweets and interviews for the past several months - a stop to what
he termed the Fed's "crazy" round of interest rate hikes that in his view were undercutting the growth he has sought to foster.
The Fed has
been raising rates since December 2015, including four times last year, to a current range of 2.25 per cent to 2.5 per cent.
Kashkari's
comments put a positive spin on last week's decision.
"I think there are more people out there who want to work; let's let the economy
continue to strengthen and if we see signs then, wages pick up, inflation picks up, we can always tap the brakes then; let's just not tap
the brakes prematurely," Kashkari said.
It is a view Kashkari has staked out repeatedly over the past couple of years, but only recently has
it been adopted by his policy-setting colleagues.
There are some risks, including slowing growth in China and confusion surrounding
Britain's exit from the European Union, he said
Optimism fuelled early last year by Trump's hefty tax cuts has eroded amid mounting concern over trade tariffs, Kashkari said, keeping some
businesses from making investments.
Still, he said, the US economic outlook was strong
As long as there are no signs the economy is overheating, he said, the Fed should not risk pushing short-term rates above long-term ones,
creating a so-called inverted yield curve that would herald a recession
