Fed's Kashkari Supports Last Week's 50 bps Rate Cut, Projects Additional 50 bps Cuts This Year

Sep 23, 2024, 11:12 AM

Minneapolis Federal Reserve Bank President Neel Kashkari has expressed support for last week's 50 basis points (bps) interest rate cut, stating that it was the right decision given the progress on inflation and the softening of the labor market. Kashkari also projected an additional 50 bps in cuts this year. He emphasized that the balance of risks has shifted towards the risk of further labor market weakening and higher unemployment. Kashkari noted that the Federal Reserve's policy remains in a net tight position and that there is a lot of ambiguity around what the neutral rate level should be. He mentioned that both a 25 or 50 bps rate cut would have been reasonable.