- Hurdle to changing policy rate has increased due to tariffs
- Bar is higher for cutting rates even if the economy and labor market weakens
- Falling neutral rate due to tariffs reduces immediate need for rate hike
- It's 'too risky' to look through inflation effects of tariffs
- First priority must be keeping long-run inflation expectations anchored
The market is pricing in 114 bps in cuts in the year ahead but Kashkari is pushing back. Other Fed members have hinted at similar thinking.
