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Images: The Image Bank/Getty Images and John Lamparski/Contributor/Getty; Illustration: Axios Visuals

As the Federal Reserve signals it may cut interest rates again later this month, Minneapolis Fed president Neel Kashkari says the central bank is tuning out calls by President Trump to do more to support the economy — and relying on the strength of the data it collects to justify its moves.

Why it matters: Trump’s attempts to strong-arm the Fed, which has already slashed borrowing costs twice this year, have grown more frequent in recent weeks — and put the central bank on the defensive about its apolitical posture.

"The louder the politics gets turned up, the more we hug data and analysis," Kashkari, whose calls for lower interest started before Trump took office, tells Axios.

Between the lines: The Fed's stance on monetary policy has come full-circle: About 1 year ago, it was raising rates. In July, it announced the 1st rate cut since the financial crisis in an attempt to keep the record economic expansion going as risks — namely, Trump's trade war — threaten economic growth.

  • Businesses have pulled back on spending in the face of the uncertainty, and the pace of hiring has slowed.
  • "People are nervous about where [trade is] going to go, especially obviously for exporters or global companies," says Kashkari, who gets a vote on the rotating monetary policy setting committee next year.
  • "If everyone is spooked, that’s enough to maybe tip the economy over."

On whether or not the Fed's actions to lower rates could give Trump cover to ramp up the trade war — a topic of a highly controversial op-ed by former New York Fed president Bill Dudley — Kashkari says that inflation running below its 2% target is a major factor for the Fed's move, too.

Let's say, if we had inflation well above target, and we were worried that inflation expectations were climbing, I think then we would be much more reluctant to say, 'Well, we're going to try to cut rates because of the trade war.' ... Setting aside what the cause is, just looking at that data — that data would imply you want a more accommodative monetary policy.
— Minneapolis Fed president Neel Kashkari

The big picture: The Fed is hearing from community leaders and activists in a series of unprecedented “listening sessions“ across the country. The events, as chairman Jerome Powell has pointed out many times, have convinced the Fed of the importance of keeping the recovery going for communities that are still convalescing from the financial crisis.

  • “The conventional wisdom was monetary policy does not have a role to play in distributional outcomes ... We’ve now learned that monetary policy has the biggest role to play because we need to create the context for all of these different groups to be able to participate in the economy,” Kashkari tells Axios.

What’s next: Although he won't have a vote at this month's Fed meeting, Kashkari would be voting with what may be the majority.

  • I will likely be in favor of cutting interest rates in October," he tells Axios. "But I don't know how low we have to go — it really is going to depend on how the data comes out."

Go deeper

What's ahead for the newest female CEOs

Jane Fraser (L) and Rosalind Brewer. Photos: Jason Redmond/AFP via Getty Images; Rodrigo Capote/Bloomberg via Getty Images.

The number of women at the helm of America’s biggest companies pales in comparison to men, but is newly growing — and their tasks are huge.

What's going on: Jane Fraser took over at Citigroup this week, the first woman to ever lead a major U.S. bank. Rosalind Brewer will take the reins at Walgreens in the coming weeks (March 15) — a company that's been run by white men for more than a century.

2 hours ago - Health

Biden says U.S. will have enough vaccines for 300 million adults by end of May

President Biden. Photo: Anna Moneymaker-Pool/Getty Images

President Biden on Tuesday said that ramped-up coronavirus vaccine production will provide enough doses for 300 million Americans by the end May.

Why it matters: That's two months sooner than Biden's previous promise of enough vaccines for all American adults by the end of July.

Updated 4 hours ago - Health

Texas to end all coronavirus restrictions

Texas Gov. Greg Abbott speaking at the White House in December 2020. Photo: Al Drago/Bloomberg via Getty Images

Texas will end its coronavirus restrictions next week with an upcoming executive order, Gov. Greg Abbott (R) announced Tuesday during a press conference in Lubbock.

Why it matters: After Abbott signs the new order, which rescinds previous orders, all businesses can open to 100% capacity and the statewide mask mandate will be over, though large parts of the state will remain under mask local ordinances.