Neel Kashkari, the President of the Minneapolis Fed, suggests that there could be two rate cuts this year due to the current slowdown in the US economy.
Key Quotes
- The economy is slowing.
- Still not clear what impact tariffs will have on inflation.
- It may still be appropriate in the near term to begin adjusting the policy rate.
- The Fed needs to respond to the slowing economy.
- Will not know the answer to inflation for a while; meanwhile, data on slowing is clear.
- Two rate cuts this year still seem appropriate.
- If inflation does rise because of tariffs, the Fed could pause or even hike.
- The unemployment number is very important, but the Fed knows revisions are possible.
- Wage growth is declining, which suggests the labour market is cooling.
- Will not comment on President’s personnel choices, but do not doubt the BLS data.
- Ultimately you cannot fake economic reality.
- People will feel the economy; they cannot be convinced jobs or inflation data are different than what they are.
