Minneapolis Fed President Kashkari sees a slower pace of rate cuts ahead

Published On Sep 23, 2024, 9:00 AM

Minneapolis Fed President Neel Kashkari has indicated that the Federal Reserve may adopt a slower pace of interest rate cuts following a recent reduction of 50 basis points. This marks a reversal from the previous aggressive stance aimed at combating inflation and reflects growing concerns about a weakening labor market. Kashkari suggested that future cuts will likely be smaller, possibly returning to quarter-point changes, unless significant shifts in economic data occur. Fellow Fed member, Raphael Bostic, supports moving towards a neutral interest rate more rapidly than anticipated, based on recent improvements in inflation and labor market conditions. Overall, the Fed is navigating between encouraging growth and controlling inflation, and is likely to proceed cautiously with any further rate adjustments.