MET MetLife Inc

ROCHESTER, Minn.—Federal Reserve Bank of Minneapolis President Neel Kashkari said Wednesday that the central bank wants to get back to a normal interest-rate environment but won't move aggressively to raise rates.

Speaking at a town hall event in Rochester, Minn., Mr. Kashkari said the Fed is waiting to act until it has data to support a move. He said he expects moderate economic growth.

"If we [raised rates] aggressively, we would be setting the brakes on the economy," he said. "You will see us move when the data allows."

Mr. Kashkari doesn't hold a voting slot on the interest-rate-setting Federal Open Market Committee.

Mr. Kashkari, not an economist by training, also spoke about his initiative to explore ending "too big to fail," a situation in which the large scale of major banks poses a systemic risk to the financial system in the event of a crisis. He said financial regulation put in place since the crisis "hasn't gone far enough."

A top Treasury Department official during the financial crisis, Mr. Kashkari has made the health of the banking system a priority since taking the helm of the Minneapolis Fed earlier this year. In February, he announced the initiative to explore the remaining threat posed by banks that are too big to fail. The Minneapolis Fed will hold several conferences on the topic—its next is later this month—and plans to submit policy proposals for Congress to consider by the end of the year.

Mr. Kashkari on Wednesday also criticized insurance giant MetLife Inc. for successfully challenging the Obama administration's designation of the firm as a systemically important financial institution. The administration has said it would appeal the April court decision.

"The risk that MetLife has is based on the businesses that they run," he said. "The real problem is that they are fighting it in court."

As president of the Minneapolis Fed, Mr. Kashkari doesn't have the power to create regulatory policies, which are set by the Washington-based board of governors and other agencies. The Minneapolis Fed overseas regional banks in its district, but none are global financial institutions of the type potentially considered too big to fail.

Write to Shayndi Raice at shayndi.raice@wsj.com

(END) Dow Jones Newswires

May 04, 2016 20:15 ET (00:15 GMT)

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