The next Fed rate hike does not matter as much as fiscal policy, Federal Reserve Bank of Minneapolis President Neel Kashkari said Friday.

“I don’t like all this attention on the next interest rate move,” Kashkari said in a symposium livecast on the Minneapolis Fed website, “The truth is the next interest rate move is not that important in the big picture of the trajectory of our country. What really matters much more is fiscal policy. The Fed can do nothing about productivity growth.”

Federal Reserve Bank of Minneapolis President Neel Kashkari.
Federal Reserve Bank of Minneapolis President Neel Kashkari. Bloomberg News

Wealth is created by “how innovative we are, how educated our workforce is.” The Fed, he said, has “no ability to affect that.”

Kashkari said, “we spend all this time focusing on interest rates” because Washington hasn’t done much about “these other issues.”

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.