Minneapolis Fed Pres. Neel Kashkari: Two cuts this year 'still seem reasonable to me'

Economic Slowdown & Inflation - The economy is slowing, with housing services inflation gently declining, non-housing services inflation coming down, and wage growth decreasing [4][5] - Consumer spending is cooling, further indicating a slowdown in the real underlying economy [5] - The ultimate effects of tariffs on inflation are uncertain and may not be known for quarters or a year or more [5] - The average effective tariff being paid at the border is around 10%, well short of the 16% headline rate [7] Monetary Policy - It may become appropriate to start adjusting the federal funds rate in the near term due to the slowing economy [6] - Two rate cuts this year still seem reasonable, but the actual number could vary depending on the impact of tariffs on inflation [14][15] - If inflation really increases due to tariffs, the possibility of pausing or even raising rates again exists [15] - The FOMC is aware of the potential need to adjust course (cutting and then raising rates) due to the uncertain effects of tariffs [18][19] Data & Uncertainty - The effects of tariffs are taking longer to become clear, making policy decisions difficult [19] - Companies hoarded inventory in advance of tariffs, delaying the passing of costs onto customers and obscuring the immediate inflationary impact [10][17] - The BLS job numbers are subject to large revisions and declining survey response rates, making them less reliable [21][22] - Wage growth is declining, indicating a cooling labor market [23]