Minneapolis Fed President Neel Kashkari has refined his expectations for interest rate cuts in 2024, now leaning towards possibility of fewer reductions due to robust economic data emerging since the year’s start.
Initially forecasting two rate cuts for the year, Kashkari expressed in a WSJ Live interview that current economic indicators might necessitate only a single cut. “I was at two in December,” he remarked. “It’s hard to see, with the data that’s come in, that I’d be saying more cuts than I had in December, or potentially one fewer, but I haven’t decided.”
Kashkari emphasized that Fed’s “base case scenario” no longer includes further rate hikes. He suggested that should inflation persist beyond current projections, Fed’s immediate response would be to maintain the existing interest rates for “an extended period of time.” rather than implementing additional increases.
