Asia FX dithers as dollar steadies before Powell speech; yen muted after CPI data
Investing.com -- Neel Kashkari, the President and CEO of the Federal Reserve Bank of Minneapolis, provided insights into the labor market, future rate cuts, and the 10-year yield during an interview with CNBC today.
Kashkari noted that the rise in the 10-year yield, despite the Federal Reserve’s rate cuts, seems to be mostly about real rates. He expressed uncertainty about where the neutral rate is and indicated that the rise could also be due to fiscal deficits.
In terms of inflation, Kashkari stated that the Federal Reserve will bring it back down. He also mentioned that the most important data today is the 4% unemployment rate, adding that the labor market is still in good shape.
Kashkari further stated that the economy is strong, and businesses are optimistic. When asked about the tariff policy, he said that a wait-and-see approach is needed at this time. He added that the Federal Reserve is in a good position to wait for more information on the administration’s policies.
The CEO also indicated that if good inflation data is seen and the labor market remains strong, it would lead him to support further rate cuts. He noted that inflation is coming down and expressed confidence that housing inflation will assist in bringing overall inflation down.
Finally, Kashkari stated that barring any surprising developments in administration policy, he would expect the policy rate to be modestly lower at the end of the year than it is now.
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