Fed's Kashkari: Fed will hold rates where they are if we need to
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Fed's Kashkari: Fed will hold rates where they are if we need to

Federal Reserve (Fed) of Minneapolis President Neel Kashkari hit newswires for the second time on Tuesday as the Fed official weighs in on the Fed's inflation and interest rate outlook for the rest of the year.

Key highlights

  • Most likely scenario is rates stay put for an extended period.
  • If disinflation returns, or we see marked weakening in the job market, that might lead to rate cuts.
  • Raising rates is not the most likely, but it can't be ruled out.
  • If we see a marked labor weakening, it could spur a cut.
  • Friday's jobs report was softer than expected, but not actually soft.
  • New lease rates seem to have ticked up, and that's a little concerning.
  • If inflation becomes embedded, we might hike if needed.
  • Kashkari would need to see multiple readings on inflation to be confident enough to cut rates.
  • Kashkari put down 2 rate cuts in 2024 in March, it's possible it will stay at 2, or go to 1 or even 0 rate cuts for the June SEP.
  • The US economy is in a good place.
  • It looks like we will go sideways for a while.
  • We need to be more patient.
  • Keeping rates where they are for longer than the public expects is much more likely than raising rates.

More from Fed's Kashkari:

  • Too soon to declare inflation progress stalled out.
  • If Fed needs to hold rates for an extended period, or raise rates, we will do that.
  • Rate cut this year is still a possibility.
  • If inflation moves sideways and labor market remains strong, we should not to anything on rates.