Fed president expecting smaller cuts after half-point reduction
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, on Monday said that consumers can expect smaller interest rate cuts after last week’s significant half-point reduction.
"I was comfortable taking a larger first step, and then as we go forward, I expect, on balance, we will probably take smaller steps unless the data changes materially,” Kashkari said on CNBC.
“Ultimately, we want to get back to a neutral policy stance where the economy is in balance and we're not pushing the economy one way or the other. And this was just a larger first step to get us going,” Kashkari added.
The Federal Open Market Committee (FOMC) last week decided to decrease the benchmark overnight borrowing rate by 50 basis points, citing “the progress on inflation” and “the balance of risks” as factors in its reasoning.
It was the first time the committee cut rates since the COVID-19 pandemic.
“I think if you look, we've held rates at a pretty high level for an extended period of time, longer traditionally than history.This is just acknowledging, let's take a step now toward neutral, recognizing that we're still tight,” Kashkari said during the CNBC interview.
“Certainly, we were late, and I was late in raising," he added. "We always want to learn from our mistakes, and we don't want to repeat those. That's not what's driving this move, but we are aware of the mistake that I think that we collectively made in holding rates a little bit low for a little bit too long.”
Kashkari also pushed back on the notion that the decision to cut rates was influenced by the upcoming presidential election in November.
“I think all of my colleagues have said, it's simply not a factor in our deliberation,” Kashkari said.
Date: | |
Tag: | Federal Reserve |
Topics
-
CNBC - Business
Fed Governor Waller says inflation softening faster than he expected put him in half-point-cut camp
Waller told CNBC that the data is showing core inflation in the Fed's preferred measure is running below 1.8%2 days ago - Federal Reserve -
CNBC - Business
Minneapolis Fed President Kashkari sees a slower pace of rate cuts ahead
Kashkari said Monday that he expects to dial down the pace of interest rate reductions after the central bank eased policy by a half percentage point last week.4 hours ago - Federal Reserve -
NBC News - Top stories
Minneapolis Fed President Kashkari sees a slower pace of rate cuts ahead
Minneapolis Federal Reserve President Neel Kashkari said Monday that he expects policymakers to dial down the pace of interest rate cuts after last week’s half percentage point reduction.3 hours ago - Federal Reserve -
MarketWatch - Business
After Fed’s 50-basis-point rate cut, where should I invest $50,000? I’m 38 — and have a high risk tolerance.
The U.S. Federal Reserve made its biggest cut to the benchmark rate in 16 years on Wednesday.7 hours ago -
CBS News - Top stories
Should you buy a home after the Fed's big rate cut?
There are some compelling reasons why homebuyers may want to act now that the Fed has cut rates. Here's what to know.3 days ago -
CNBC - Business
China unexpectedly leaves benchmark lending rates unchanged after Fed’s jumbo cut
The People's Bank of China (PBOC) said it would keep the one-year loan prime rate (LPR) at 3.35%, as well as the five-year LPR at 3.85%.3 days ago - China -
The New York Times - Business
Stocks Hit Record High a Day After Fed’s Big Interest Rate Cut
The S&P 500 rose 1.7 percent on Thursday, rallying a day after the Federal Reserve cut interest rates by half a percentage point.3 days ago -
MarketWatch - Business
Oil prices log weekly gains after Fed rate cut, rising Middle East tensions
Oil futures booked solid weekly gains, boosted by the Federal Reserve’s large interest-rate cut and a renewed rise in tensions in the Middle East.2 days ago - Federal Reserve
More from The Hill
-
The Hill - Politics
Harris topping Trump by 5 points in Pennsylvania: Poll
Vice President Harris is leading former President Trump in the swing state of Pennsylvania, according to a new Spotlight PA/MassINC poll. Harris is winning 49 percent in the poll, compared to 44 ...37 minutes ago - Donald Trump -
The Hill - Politics
Harris tops Trump by 5 points in Minnesota: Poll
Vice President Harris topped former President Trump by 5 points in Minnesota, according to a new poll. Harris garnered 48 percent support from registered voters in the North Star State to Trump’s ...46 minutes ago - Donald Trump -
The Hill - Politics
Harris to skip, Trump to attend annual Al Smith dinner
Vice President Harris will not attend the annual Al Smith dinner in New York next month, while former President Trump said on Monday that he will be there. The New York Catholic Charities ...46 minutes ago - Donald Trump -
The Hill - Politics
Trump and Harris’s tax policies offer more of the same — states can pave a better way
State governments are considering tax policy that favors businesses that make real investments in the local economy, while also considering the impact of businesses that view the locals as merely a ...54 minutes ago - Donald Trump -
The Hill - Politics
Growing number of GOP national security leaders back Harris
A growing number of Republican national security figures are endorsing Vice President Harris in the 2024 contest, firing off a series of letters warning of the risks of re-electing former President ...58 minutes ago