## Kashkari Sees Room for More Rate Cuts Despite Inflation
Minneapolis Federal Reserve President Neel Kashkari is advocating for more interest rate cuts than previously anticipated, even with inflation running above the Fed’s target. Here’s a breakdown of his reasoning:
- More Cuts Ahead: Kashkari believes the Fed should lower its benchmark borrowing level at each of the remaining two meetings this year, in addition to the one already approved. 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 their effect is a one-time event.
- Weakening Labor Market: Kashkari cites a weakening labor market as another reason for easier monetary policy.
- Inflation Concerns: While inflation is above the Fed’s 2% target, Kashkari believes the factors mentioned above justify further easing. However, he is not content with the current 3% inflation rate.
- Meeting Dynamics: Kashkari described the recent FOMC meeting as “unremarkable,” suggesting a smooth process despite differing views among officials.
- Future Vote: Kashkari does not have a vote on the FOMC this year but will in 2026.
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