In December, Minneapolis Federal Reserve President Neel Kashkari hinted at the possibility of a Federal Reserve interest rate reduction.
The Federal Reserve finalized its revised outlook last week, reducing their projections for rate cuts this year to one from the three they had previously estimated in March. The cautious posture is a result of the necessity for additional evidence that inflation is consistently progressing toward the 2% target, particularly in light of the fact that progress had previously stopped earlier this year.
Kashkari underscored the Federal Reserve’s present approach of accumulating more comprehensive data on the economy, inflation, and the labor market prior to formulating any policy decisions.
Kashkari stated, “We are currently in a very favorable position to take our time, gather additional inflation data, and gather additional data on the economy and labor market before we are required to make any decisions.” He further stated that it is probable that a single rate reduction will take place by the conclusion of the year.
The robust performance of the US labor market in 2022 and 2023 caught Kashkari, who is renowned for his cautious approach to monetary policy, off guard. However, he predicts that the labor market will experience a decline in the near future.
The Federal Reserve made the decision last week to maintain the policy interest rate in the range of 5.25%-5.50% in order to maintain economic pressure and reduce inflation. Additionally, the Federal Reserve’s dot-plot chart indicates that there will be only one rate reduction this year.
Also Read: ZKsync will debut on Binance with token distribution despite controversy
Wallets