Minneapolis Fed President Neel Kashkari said US monetary policy is likely “pretty close to neutral”. Speaking to CNBC, Kashkari said policymakers now need clarity on whether inflation or labor market dynamics will prove the dominant force shaping the outlook. “And then we can move from a neutral stance, whatever direction is necessary,” he added.
On inflation, Kashkari warned that the main risk lies in persistence, particularly as tariff-related price pressures may take “multiple years” to fully work their way through the economy.
Turning to geopolitics, Kashkari said the primary economic risk from the Trump administration’s capture of Venezuela’s leader over the weekend would come through higher oil prices. Drawing comparisons to Russia’s invasion of Ukraine, he noted that commodity shocks — rather than political events themselves — are the channel most likely to directly impact the US economy.
His comments carry added weight in 2026, with Kashkari holding a voting seat on the Federal Open Market Committee.
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