- Supported rate cut this week
- Risk of sharp increase in unemployment warrants some Fed action
- Neutral rate has likely risen to 3.1%
- Fed policy has not been as tight as previously thought
- Can always cut rates more quickly if labour market weakens more than expected
- If labour market proves resilient or inflation rises, should pause and hold policy rate
- Open to raising policy rate if economic conditions warrant
- Hard to see inflation climbing much higher than 3% from tariffs
Kashkari has been leaning hawkish for a long time and he's not deviating from his usual stance here. He's also been one of the very few open for rate hikes if needed but that will likely take inflation to start rising steadily above 3%.
Kashkari is not a voter this year but will be next year.
