(Reuters) -Minneapolis Federal Reserve President Neel Kashkari said Thursday he does not think that there is a big chance the labor market will weaken sharply or inflation will surge, though of the two, "there's more risk of a labor market negative surprise than a big uptick in inflation."

"On the other hand, if I were to guess which mistake we're more likely making, I think we're more likely betting that the economy is really slowing more than it really is," Kashkari told a town hall in Rapid City, South Dakota.

Kashkari supported the Fed's quarter-point interest-rate cut in September and feels two more such cuts will be warranted by the end of the year, he said last month. Like many of his colleagues, he sees the rate cuts as a form of insurance against dire outcomes that may not actually materialize.

Last year, for instance, the Fed cut rates to shore up what many policymakers feared was a rapidly softening labor market, and the economy proved to be unexpectedly resilient, he said.

As for inflation, Kashkari said Thursday that he thinks it is unlikely the inflation rate will rise to 4% or 5%, "because we can do the math of what tariff rates translate into what inflation. So I think the risk of inflation is more of one of persistence - that it's not so much of a one time event, but that it stays at 3% for an extended period of time."

The Fed targets 2% inflation; in August it was 2.7% by the Fed's targeted measure. Some of Kashkari's policymaking colleagues say the Fed should be cautious about cutting rates when the inflation rate is too-high and rising

Though the ongoing federal government shutdown is delaying the publication of economic data, Fed policymakers have enough unofficial data through private sources and their own community and business outreach efforts to have a pretty good idea of economic conditions, Kashkari said. 

"We can make our way through while the shutdown is happening," Kashkari said. "But the longer it goes on, the less confidence I have that we are reading the economy appropriately, because there's no substitute for the gold standard government data that we rely on."