Fed's Kashkari says fiscal stimulus supports moving ahead with interest-rate tightening

Minneapolis Federal Reserve President Neel Kashkari said recent steps by the federal government to stimulate economic growth, including tax cuts, make reaching a 2% inflation objective more likely. That means the Fed can most likely move ahead with additional planned interest-rate hikes this year, he said in an interview with the Wall Street Journal published early Monday. Kashkari voted against all three rate hikes approved by the central bank last year, when he had his turn on the rotational policy-setting panel. He cited persistent tame inflation at that time. Congress and the White House approved tax cuts last December and federal spending increases in February that are "macroeconomically significant, and they are big enough to have an effect on the trajectory of the economy... that could change things in a meaningful way," Kashkari told the Journal. The Fed raised rates again last month, bringing the range to between 1.5% to 1.75% and continued to signal two more increases this year. Kashkari would not say what exact number of hikes he expects in 2018. "It isn't going to be obvious to me once we achieve our inflation target that we need to now put the brakes on the economy, but I would argue once we achieve our inflation target, we should try to get to neutral in a reasonable period of time," he said in the interview, adding that bank policy might already be close. "We might be one hike away from achieving neutral," he said.