While the government continues to spend, the Fed continues to raise rates. The Federal Open Market Committee, of which Kashkari is not a voting member this year, in March approved another quarter-point hike to its benchmark rate, raising the target range to 1.5 percent to 1.75 percent.
At the same time, the national debt has surged to $21.1 trillion, of which $15.4 trillion is owed by the public. Critics of the central bank have alleged that near-zero rates made it easy for the government to run up the massive IOU.
However, Kashkari said the Fed in its deliberations does not consider the impact rates have on debt service.
“The fiscal situation is enormously important to our country,” Kashkari said during a discussion. “We have to make tough choices, and so far we’re not making those tough choices.”