Kashkari says the economy may be stronger than expected, with limited risk of major slowdown (earlier headline post).
Sees labour-market weakness as a bigger risk than renewed inflation.
Supports two more rate cuts as insurance, not because of immediate weakness.
Inflation may stay near 3%, but unlikely to surge higher.
Warns the shutdown is blurring real-time readings of the economy.
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Minneapolis Fed President Neel Kashkari said he doubts the U.S. economy is decelerating as sharply as many believe, suggesting growth remains firmer than commonly assumed even as policymakers weigh additional rate cuts. Kashkari backed the Fed’s September quarter-point rate cut.
Speaking at a town hall in Rapid City, South Dakota, Kashkari said the risk of a labour-market downturn is greater than the risk of another inflation surge, but overall he sees both as unlikely
- “If I had to guess which mistake we’re making, I think we’re more likely overestimating the degree of slowdown”
- said he still expects two more cuts by year-end, describing them as insurance against unlikely downside scenarios rather than a response to clear weakness
- recalled that similar pre-emptive easing last year helped sustain an unexpectedly resilient labour market.
On inflation, Kashkari said it was improbable that price growth would re-accelerate to 4–5%, arguing that current tariff effects are limited. Instead, he warned inflation may linger around 3% for an extended period — above the Fed’s 2% target, but not dangerously high.
Kashkari also cautioned that the ongoing U.S. government shutdown is making it harder to gauge economic conditions, noting that while policymakers can rely on private data and anecdotal evidence, “the longer it goes on, the less confident I am that we’re reading the economy correctly.”
