Minneapolis Fed President Neel Kashkari indicated that Fed’s focus is increasingly shifting toward concerns in the labor market, moving away from the inflation side of its dual mandate.
In an interview with WSI, Kashkari emphasized that “the balance of risks has shifted more towards the labor market,” making the debate over a potential rate cut in September “an appropriate one to have.”
While acknowledging that inflation is showing signs of progress, Kashkari expressed concerns about “concerning signs” in the labor market.
Despite these, he stated that there is no compelling reason to lower interest rates by more than a quarter percentage point at a time, citing the continued low levels of layoffs and unemployment benefit claims, which do not yet indicate a significant downturn in the labor market.
