Kashkari Advocates for Strategic Rate Cuts Amid Economic Uncertainty

Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, supports recent interest rate cuts and recommends further reductions amid signs of weakening labor market demand. Kashkari highlights potential unemployment risks and a low likelihood of inflation surge due to tariffs, proposing strategic rate adjustments in response to economic changes.

In a notable shift of perspective, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, has expressed his support for recent rate cuts and suggested additional reductions in response to emerging economic challenges.

Kashkari, who initially believed only two rate cuts for the entire year would suffice, has revised his stance owing to a decrease in job creation linked to declining immigration and potential labor demand softening.

While the Federal Reserve lowered its benchmark rate to 4.00%-4.25%, Kashkari warns of further labor market weakening and suggests rate cuts could reach 3.50%-3.75% by year's end. His viewpoint is shared among some policymakers, sparking discussions around inflation concerns and future economic resilience.

(With inputs from agencies.)