Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said that inflation in the United States is gradually slowing, but there is still a risk that unemployment could rise sharply, DKNews.kz reports.
He made the comments in an interview with CNBC.
What the Fed is most focused on now
According to Kashkari, the key question for the Federal Reserve today is:
- where to place more focus
- on a cooling labor market
- or on inflation that remains stubbornly high
He noted that unemployment is around 4.6% - a sign that the labor market is gradually losing momentum.
At the same time, he is skeptical about data showing that inflation is easing, pointing to possible issues with statistics caused by the record-long government shutdown in the fall.
On interest rates
Kashkari also said he believes the Fed is getting close to the point where it should stop cutting interest rates.
In other words, further easing may be risky against the backdrop of uncertainty in the labor market.
On Jerome Powell
Separately, Kashkari said he would welcome Jerome Powell staying on the Fed’s Board of Governors after his term as chair expires in May.
Even if he is replaced as chair, Powell’s term as governor runs until January 2028.
