Minneapolis Federal Reserve Bank President Neel Kashkari recently stated that inflation is currently moving “sideways,” and the U.S. economy will require “many more months of positive inflation data” before considering one to two rate cuts this year. His comments suggest that interest rates may remain high for an extended period, despite earlier predictions of multiple cuts in 2024.
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
In a conversation with CNBC Europe Kashkari recognized that government expenditure has played a role in the rise in inflation. Nonetheless he highlighted that disruptions on the supply side like the closure of services during the pandemic, Russias actions in Ukraine affecting commodity prices and tangled up supply chains were 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 mentioned that the American economy has shown strength with solid growth in GDP and consumer spending going against previous predictions of an economic downturn. This resilience along, with a housing market has convinced him that there’s no urgency to make quick decisions on cutting rates.
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 Minneapolis Fed president’s comments align with the central bank’s plan to keep interest rates higher to tame post-pandemic inflation. However, this approach has wide-ranging implications for U.S. consumers, as higher rates make debt more expensive at a time when delinquency rates are mounting.
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
