Watch CNBC's full interview with Minneapolis Fed President Neel Kashkari

Economic Slowdown & Inflation - The economy is slowing, with housing services inflation gently declining, non-housing services inflation coming down, and wage growth decreasing [3][4] - Consumer spending is cooling, further suggesting a slowdown in the real underlying economy [4] - The ultimate effects of tariffs on inflation are uncertain and may not be known for quarters or a year or more [4] - The average effective tariff being paid at the border is around 10%, climbing month after month, but still short of the 16% headline rate [6] - It is uncertain how high core goods inflation will get and whether it will spill over into other categories and be persistent [11] Monetary Policy - It may become appropriate to start adjusting the federal funds rate in the near term due to the slowing economy [5] - Two rate cuts this year still seem reasonable, but the actual number could vary depending on the effect of tariffs on inflation [13][14] - If tariffs have a bigger effect on inflation, the Fed could do one or more rate cuts and then pause, or even raise rates again [14] - The FOMC is aware of the potential need to adjust course (cut and then raise rates) due to the uncertain effects of tariffs [17][18] Data & Credibility - The BLS data is subject to revisions and declining survey response rates, requiring the Fed to look at other data sources [21][22] - There are concerns about the credibility of economic data following the firing of the head of the BLS, but it is difficult to fake economic reality [25][28] - Wage growth is declining, indicating a cooling labor market [22] Tariffs Impact - Companies have not taken up prices in the way they did during the pandemic, possibly due to the complexities of tariffs compared to the pandemic [7][8] - Some companies hoarded inventory to protect themselves and their customers from tariffs [9][16] - The market is discounting that the tariffs, at least as we know them today, stay that way [12]