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In a virtual event hosted by LinkedIn, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, struck a cautious tone on the prospects of rate cuts in the months ahead. “If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all,” Kashkari remarked, as quoted by Bloomberg.

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The Fed official cited the recent inflation readings for January and February as “a little bit concerning,” underscoring the need to see more evidence that prices are trending downwards before contemplating an easing of monetary policy, as per Bloomberg.

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Kashkari, who does not have a vote on the rate-setting Federal Open Market Committee this year, had previously penciled in two potential rate cuts in 2024, contingent on inflation continuing its descent. “In March I had jotted down two rate cuts this year if inflation continues to fall back towards our 2% target,” he disclosed.

Emphasizing the data-driven approach, Kashkari stressed the importance of letting inflation figures guide the Fed’s interest rate decisions going forward.

The Minneapolis Fed chief’s remarks echo his stance from a recent event last month, where he posited, “If we have a run rate that’s very attractive, people have jobs, businesses are doing well, inflation is coming back down, why do anything?,” as quoted by Bloomberg.

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Published: 05 Apr 2024, 08:43 AM IST