Fed's Kashkari wants to see 'many more months' of positive inflation data before a rate cut

LONDON — The Federal Reserve should wait for significant progress on inflation before cutting interest rates, Minneapolis Federal Reserve President Neel Kashkari told CNBC Tuesday.

Asked what conditions are needed for the Fed to cut rates once or twice this year, Kashkari said: "Many more months of positive inflation data, I think, to give me confidence that it's appropriate to dial back."

He also said the central bank could potentially even hike rates if inflation fails to come down further. "I don't think we should rule anything out at this point," Kashkari added.

It comes after he said earlier this month that the Fed may need to hold interest rates steady for "an extended period" — possibly all year.

Divergence has emerged among the major central banks on the outlook for interest rates, with the Fed — usually first to move — growing more hawkish amid still-high inflation.

The European Central Bank is now expected to lower rates before the Fed, with two key figures from the ECB throwing their weight behind a June cut on Monday.

The Bank of England is also broadly expected to cut rates this summer.

This is a developing story and will be updated shortly.