Fed Official Kashkari: December Rate Cut a 'Reasonable' Expectation

Fed Official Kashkari: December Rate Cut a 'Reasonable' Expectation

Minneapolis Federal Reserve President Neel Kashkari has indicated that it is a "reasonable prediction" for the U.S. central bank to cut interest rates once this year, likely in December. Speaking on CBS' "Face the Nation," Kashkari emphasized that any decision on rate cuts will depend on the quality of incoming economic data, including inflation and labor market statistics. He noted that the Federal Reserve is in a good position to take its time in assessing this data before making any decisions.

Kashkari expressed the need for more evidence to confirm that inflation is trending back towards the Fed's 2% target. The Fed recently held its benchmark policy rate in the 5.25-5.50% range to maintain pressure on the economy to cool inflation. Kashkari also commented on the unexpectedly strong job market, although he anticipates some cooling ahead. He highlighted the impact of high borrowing costs on the housing market, suggesting that the best course of action for the Fed is to bring inflation back to target levels.

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