Fed's Kashkari says U.S. economy has room to run

WASHINGTON (Reuters) - Minneapolis Federal Reserve President Neel Kashkari said on Tuesday the Fed should continue to focus on further progress in the U.S. labor market until inflation pressures emerge.

"My view is let's let the economy keep creating jobs, bringing workers off the sidelines so long as it's not creating inflation," Kashkari said at a town hall meeting in Minnesota streamed live on the bank's website.

He added that given inflation has been below the Fed's two-percent target rate for more than four years, there appeared no urgency to raise interest rates.

Kashkari is not a voting member on the Fed's rate-setting committee until next year, but takes part in deliberations.

Most Fed policymakers are backing a rate hike by year's end should the labor market and inflation continue to firm.

Kashkari has yet to comment on when he prefers to see a rate increase and has said more patience is less risky than raising the benchmark interest rate too soon.

(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)

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