Kashkari also expected there to be no grand bargain to resolve the "fiscal cliff," which would see the expiration of the Bush tax cuts and trigger automatic federal spending cuts in January.
Instead, he said a "mini-bargain" would likely be struck, amounting to little more than kicking the can down the road.
"I'm not sure we would see a huge rally," he said, adding that such a scenario could put the economy at a growth rate of 1½ to 2 percent in 2013.
Still, he continued to believe that stocks were the better bet.
"In the long run we still think equity returns are going to be greater than bond returns," he said.
Honda was one of his top picks.
"We love the fact that it's a very high-quality company," he said, noting that its share price trades at 8 times forward earnings and has a 3.7 percent dividend yield, as well as strong exposure to emerging markets.
"We think it's a great long-term hold," he said.
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