Fed official says June rate hike pause doesn’t mean end of tightening cycle

Logo of Federal Reserve Bank

Federal Reserve Bank of Minneapolis President Neel Kashkari said he is open to holding off on another interest rate hike in June but cautioned against reading too much into a pause.

Speaking to CNBC yesterday, May 22, Kashkari underlined, “Right now it is a close call either way, versus raising another time in June or skipping.”

“Some of my colleagues have talked about skipping. Important to me is not signaling that we are done. If we did, if we were to skip in June, that does not mean we are done with our tightening cycle. It means to me we are getting more information,” he continued.

Markets currently are pricing in an almost 83% probability that the rate-setting Federal Open Market Committee (FOMC) holds off on what would be an 11th consecutive interest rate increase when it convenes June 13-14, according to the CME FedWatch.

Kashkari, who is a voting member on the FOMC this year, added, “Do we then start raising again in July? Potentially, and so that is the most important thing to me is that we are not taking it off the table.”