Fed Chair Minneapolis Neel Kashkari supports interest rate cuts amidst the stagnation of the US economy.

The slowdown in the economy and weakening data are driving Fed officials, including Mary Daly and Kashkari, to support interest rate cuts to stabilize growth and face risks from new tariffs.

MAIN CONTENT

  • Neel Kashkari supports cutting interest rates in the Fed's September meeting due to signs of economic slowdown.

  • The probability for the September cut is currently above 93% according to CME's FedWatch tool.

  • The US president's decision on Fed personnel could affect future monetary policy.

Does Neel Kashkari support cutting interest rates as the US economy shows signs of stagnation?

In a recent interview with CNBC, Kashkari emphasized that the Fed will soon need to act with interest rate cuts due to significant declines in economic growth indicators.

Kashkari stated that although the impact of new tariffs is still unclear, current data shows a weakening economy, thus the Fed cannot delay monetary policy adjustments. He will also be a voting member of the Fed's interest rate committee next year, so this viewpoint is of significant guidance.

Kashkari's participation in the group advocating for interest rate cuts indicates a trend to facilitate growth in the context of increasing geopolitical and global economic risks.

Why is the possibility of an interest rate cut in September becoming clearer?

Kashkari has forecasted since June that the Fed may implement an interest rate cut as soon as the September meeting as job indicators weaken and economic growth slows.

He emphasized that the economy cannot wait for clearer information about the impact of tariffs as the signals of slowdown are already evident. This is why the pressure for an interest rate cut this fall is becoming stronger.

This viewpoint aligns with many economists who believe that waiting too long will reduce the effectiveness of economic support measures.

What level has the probability of an interest rate cut in September reached?

According to CME's FedWatch tool, the probability of an interest rate cut in the September meeting currently exceeds 93%.

Kashkari stated that two interest rate cuts this year remain a reasonable path to maintain a flexible policy. However, if new tariffs lead to inflation rising more than expected, the Fed may pause or even raise rates again.

This reflects the unpredictable nature of the global economic environment and the challenge of balancing inflation control and growth support.

Waiting too long to cut interest rates could put the economy at greater risk in the near future.

Mary Daly, Fed Chair San Francisco, 2024

What do other Fed officials think about interest rate cuts?

Fed Chair San Francisco Mary Daly commented that the time for an interest rate cut is approaching and more than two cuts may be needed in 2024 if economic conditions continue to weaken.

Daly also warned that there are currently no clear signs of tariffs causing inflation to rise, but delaying policy could pose risks.

Notably, some other officials like Christopher Waller and Michelle Bowman remain cautious, showing a divide within the Fed regarding monetary policy.

How does changing Fed personnel affect monetary policy?

The US president is narrowing down the list of candidates to succeed Fed Chairman Jerome Powell, expected in 2026, with candidates being carefully considered.

He also plans to appoint a member who supports interest rate cuts to replace a member leaving the Fed Committee, which could change the direction of US monetary policy in the future.

Although the president criticizes high interest rates, replacing the Fed chairman soon is considered 'unlikely,' ensuring policy stability in the short term.

Frequently asked questions

What does Fed Chair Minneapolis Neel Kashkari say about interest rate cuts?

Kashkari supports interest rate cuts to address signs of economic weakness and forecasts the possibility of cuts in the September meeting.

What is the current probability of an interest rate cut in September?

CME's FedWatch tool indicates that the probability of an interest rate cut in September is currently over 93%.

What is Fed Chair San Francisco Mary Daly's view on interest rate policy?

Daly emphasized the need to quickly reduce interest rates due to economic risks, while warning that delays could have adverse consequences.

How does the US president influence the Fed's current policy?

The president may change Fed personnel to promote interest rate cuts, but replacing Chairman Powell soon is unlikely.

Could the Fed raise rates again if inflation unexpectedly rises?

Yes, if tariffs and other factors cause inflation to rise beyond forecasts, the Fed may pause or raise rates again.

Source: https://tintucbitcoin.com/fed-kashkari-ung-ho-ha-lai-2025/

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