Neel Kashkari, president of the Minneapolis Federal Reserve Bank, recently reinforced the notion that interest rate cuts seem unlikely this year, despite predictions made at the end of 2023. Speaking at the Barclays-CEPR International Monetary Policy Forum in London, Kashkari stated that inflation is currently moving sideways and that the U.S. economy would need to see “many more months of positive inflation data” before considering rate cuts.
President and CEO of the Federal Reserve Bank of Minneapolis Neel Kashkari says “We keep getting inflation readings … and we keep getting surprised. It’s higher than we expect.”
— The Post Millennial (@TPostMillennial) August 1, 2022
During an interview with CNBC Europe, Kashkari acknowledged that government spending has been “one of the factors that has contributed to the high inflation,” although he emphasized that supply-side issues, such as the services sector shutdown during the pandemic and Russia’s invasion of Ukraine, were more significant factors.
FED’S KASHKARI SAYS HE’S NOT SEEING EVIDENCE YET OF HIGH INFLATION READINGS DRIVING UP INFLATION EXPECTATIONS
Yup pic.twitter.com/DaFfeWdiIL
— zerohedge (@zerohedge) August 5, 2021
Kashkari also noted that the U.S. economy has remained remarkably resilient, with strong GDP growth and consumer spending, despite earlier forecasts of a recession. This resilience, coupled with a robust housing market, has led him to believe that there is no rush to implement rate cuts.
Minneapolis Fed President Neel Kashkari says the central bank should wait for significant progress on inflation before cutting rates. Lindsey Piegza of @Stifel discusses: pic.twitter.com/Vdkd77NK0y
— Squawk Box (@SquawkCNBC) May 28, 2024
The Federal Reserve’s decisions to maintain interest rates have effects, on American consumers leading to increased costs for borrowing money as default rates are on the rise. Even though the central bank considers factors Kashkari stressed that its primary attention is on affairs especially with projections indicating substantial losses ahead for the commercial real estate industry, in the United States.
Here is the exact moment on $SPY when Fed member Kashkari said:
“If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all”. pic.twitter.com/iSJHLP4ku2
— unusual_whales (@unusual_whales) April 4, 2024
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