Neel Kashkari, President of the Federal Reserve of Minneapolis, said on Friday that he would expect interest rates to become lower this year if the economic data move further in the same direction.
In a CNBC interview, the Central Bank official expressed the confidence that inflation will continue to rub on the 2% goal of the Fed, while the report on the non -Bistersknupen on Friday showed that the labor market continued to look great.
“Ultimately, our job is maximum employment and stable prices. If we see very good data about the inflation front, while the labor market remains strong, I would persuade myself to support the relaxation,” said Kashkari on “Squawk Box”. “I don't know why we would have to keep the installments where they were if we got the inflation really quickly.”
According to the price index for the personal consumption of the FED, it ran an annual interest rate of 2.6% in December with an annual interest rate of 2.6%. With the exception of food and energy, the core inflation was slightly higher at 2.8%.
This is still significantly higher than the 2% giel of the central bank, although Kashkari said that he expects housing -related data, especially in relation to rents, bring back the year and finally prices to aim. Kashkari is not a voter for the tariff seting of Bunde-Open Market Committee this year, but will vote in 2026.
“We will achieve inflation to 2%. We are obliged to do so,” he said.
In the past few days, however, Kashkari's colleagues have expressed concerns about what fiscal policy could do with the inflation. President Donald Trump has driven aggressive tariffs against the largest US trading partners, and some economists fear that they could bring inflation back into inflation if they trigger a trade war.
“We have to see where this uncertainty looks. What is the range of the negotiations that takes place?” he said. “Obviously, tariffs are difficult, because it is not just what we do in America, but also how other countries react and back and forth.”
The markets largely expect that the Fed will be in queue by at least June. At its meeting at the end of January, the Fed voted to keep its benchmark credit rate stable after a full percentage point of the cuts in 2024.
“My colleagues and I basically said we have to wait and see. We don't know enough information about what will be announced,” said Kashkari. “The good news is … The economy is in a good place. So we are in a very good place to just sit here until we get a lot more information about the tariff on the immigration front over the tax. All of this will be important.
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