Minneapolis Fed Chairman Neel Kashkari said on Friday that if economic data continues to move in the same direction, he expects interest rates to drop this year.
In an interview with CNBC, central bank officials said inflation would continue to drop to the Fed’s 2% target, while Friday’s non-agricultural wage report It shows that the labor market looks to continue to be strong.
“Ultimately, our jobs are the highest jobs and stable prices. If we see very good data on inflation and the labor market remains strong, then I think that will give me a further support.” “Squawk Box.” “I don’t know why we have to keep interest rates where if we really see inflation dropping rapidly.”
December’s title inflation rate was 2.6% according to Fed’s preferred choice Personal consumption expenditure price index. In addition to food and energy, the core inflation rate is higher at 2.8%.
Although Kashkari said he expects housing-related data, especially rentals, which is still above the 2% goal of the central bank, it eventually returns the price to target. Kashkari is not a voter of the Federal Open Market Committee of Rate Set this year, but will vote in 2026.
“We will reduce inflation to 2%. We are committed to this inflation,” he said.
However, Kashkari colleagues in recent days Expressed some concerns What actions can fiscal policy take toward inflation. president Donald Trump Positive tariffs were put on the U.S.’s largest trading partner, and some economists fear they could rekindle inflation if they trigger a trade war.
“We have to see what this uncertainty looks like. What is the scope of the negotiations being conducted?” he said. “Obviously tariffs are difficult because it’s not just what we do in the United States, it’s the way other countries react and go back and forth.”
The market expects to a large extent The Fed is shelved At least until June. The Fed voted at its late January meeting to keep its benchmark lending rate stable after the full percentage point cut in 2024.
“My colleagues and I have basically said we need to wait and see. We don’t know what to announce.” “The good news is… the economy is in a good place. So we’re in a good place,” Kashkari said. The place sits here until we get more information on tariffs, immigration fronts, taxes, etc. All of this will be important.”
