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Fed’s Kashkari sees modest cuts ahead, but says change in labor market holds sway

Investing.com — Minneapolis Fed President Neel Kashkari said Monday he expects modest rate cuts over the next few quarters, though added that evidence of a quicker slowdown in the labor market could lead to faster rate cuts. 

“Right now I see modest cuts over the next quarters,” Kashkari said, and downplayed the risk that a potential change in trade policies including tariffs would have prolonged impact on inflation. 

“Tariffs shouldn’t be themselves leading to ongoing inflation probably a one-time change in price level,” he said.

The Minneapolis Fed chief also touched on a potential change in immigration policy impacting the labor market, saying that it would “affect our reading of the labor market.” 

Potential policy changes aside, Kashkari continued to echo the Fed’s stance that any potential changes on monetary policy would be driven by incoming economic data. 

 

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