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Neel Kashkari, chairman of the Fed in Minneapolis, even believes that the United States hold the height of the standoff in its clash with China, despite the tumult of the market.
Inventories recorded another sharp drop on Monday, but Kashkari said general economic indicators showed little sign of tension as both sides tightened their tariff duels.
"Compared to China, the United States occupies a very strong position," told CNBC a central bank official, "Squawk Box". "Not only is our economy bigger, our economy is much less trade sensitive.Trade is important to the US economy, but it is much more for the Chinese economy, as part of its economy.
"So, if there is a slave-versus-tat strategy, and I'm not advocating it, a state-owned slave strategy seems to be leaning more in favor of the American force than that of the China."
While Kashkari was speaking, China announced that it was imposing a new set of tariffs on US goods worth $ 60 billion. The news coincided with a further decline in stocks and the Dow Jones Industrial Average, which lost about 1.9% last week, lost 450 points early Monday.
Despite Wall Street's stunned nerves at the pace of trade, Kashkari said the tariffs had not yet had a significant impact on the real economy. Indeed, US GDP grew strongly by 3.2% in the first quarter. Non-farm payrolls increased by 263,000 in April, while the unemployment rate reached its lowest level in 50 years at 3.6%.
"In general, most companies in my region still feel quite optimistic about the US economy," he said. "If this feeling were to change, we should pay attention to that."
As things stand, he does not see the need for the Fed to adjust its current policy.
Central bank officials said they would be patient about future adjustments and that they had no plans to increase or cut rates for the rest. from 2019. The market expects a reduction in the rate of a quarter by the end of the year, although Mr Kashkari has declared himself confident. At the current level, the Fed is keeping its key rate in a target range of 2.25% to 2.5%.
"I think I was more nervous [about policy] Six months ago. I was more nervous about what the monetary trajectory would do for the real economy, "he said. I think we have roughly neutral rates. "
Kashkari is a non-voting member of the federal policy committee, but he participates in the discussions.
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