Minneapolis Fed's Kashkari indicates interest rates don't need to be cut much more

Core Viewpoint - The Minneapolis Federal Reserve President Neel Kashkari believes the central bank is nearing the point to halt interest rate cuts, focusing on the balance between a slowing labor market and persistent inflation [1][2]. Interest Rate Policy - Kashkari indicated that the Federal Reserve is currently close to a neutral interest rate stance, needing more data to determine whether inflation or the labor market should dictate future policy moves [2]. - The key federal funds rate is currently set between 3.5% and 3.75%, which is approximately half a percentage point from the committee's consensus on the neutral rate [3]. Inflation and Labor Market Concerns - Kashkari expressed concerns that inflation remains too high and questioned the tightness of monetary policy, noting that the economy has shown resilience contrary to previous expectations [4]. - The unemployment rate has increased to 4.6% this year, while the Fed's preferred core inflation measure stands at 2.8%, although the accuracy of this data has been questioned due to the government shutdown [5]. Future Outlook - Kashkari highlighted the persistent risk of inflation influenced by tariffs, suggesting that these effects may take years to fully manifest [6]. - He expressed support for Jerome Powell continuing as chair of the Federal Reserve, acknowledging Powell's effective leadership despite the inevitability of a successor being named [7].