Kashkari Sees Room for More Rate Cuts Despite Inflation
Minneapolis Fed President Neel Kashkari is signaling a more dovish stance on interest rates, even with inflation exceeding the Federal Reserve’s 2% target. Here’s a breakdown of his views:
- More Rate Cuts Expected: Kashkari believes the Fed should lower its benchmark borrowing level at each of the remaining two meetings this year, in addition to the cut approved Wednesday. This would bring the total to three cuts.
- Tariffs’ Limited Impact: He expects President Trump’s tariffs to exert minimal long-term pressure on inflation, suggesting they are a “one-time effect.”
- Weakening Labor Market: A softening labor market, combined with the muted impact of tariffs, supports his call for easier monetary policy.
- FOMC Dynamics: While Kashkari doesn’t vote this year, he will in 2026. He noted the recent meeting was “unremarkable,” suggesting a lack of significant disagreement among members.
- Dovish View: Kashkari’s stance is more dovish than some, advocating for more rate cuts than previously indicated.
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