Minneapolis Federal Reserve President Neel Kashkari stated that a rate cut by the US central bank is likely by December, according to a report by Reuters. However, he emphasized the need for more evidence that inflation is moving towards the 2% target before making any changes.
Fed President Says a December Rate Cut is Likely
Kashkari shared these insights during an interview on CBS' "Face the Nation," following the Federal Reserve's decision last week to maintain the benchmark policy rate between 5.25% and 5.50%, a level sustained since last July to combat inflation.
The Fed's projections suggest a single rate cut could occur this year, reflecting the median forecast of its 19 central bankers.
US Job Market Resilience
Kashkari highlighted that the current economic position allows for careful consideration of additional data on inflation, the economy, and the labor market before making any decisions.
He suggested that if there is only one rate cut this year, it will likely happen towards the end of the year.
Known for his cautious stance on easing monetary policy, Kashkari did not specify his expectations for the number of rate cuts. He expressed surprise at the resilience of the US job market despite aggressive rate hikes in 2022 and 2023 but anticipates some cooling ahead, aiming for a balanced economy.
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