Minneapolis Fed President Kashkari Advocates Additional Rate Cuts Amid Rising Unemployment Risk

Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, has advocated for multiple interest rate cuts in 2025, citing increasing risks to the labor market, particularly rising unemployment concerns. He supports the recent rate cut and foresees at least two more reductions this year, revising his earlier stance due to softer job creation and the limited long-term inflationary impact of President Trump's tariffs. Despite inflation running above the Fed's 2% target, Kashkari believes the tariffs' effect is likely a one-time event, allowing room for easier monetary policy to support the economy. He emphasizes the importance of maintaining Federal Reserve independence amid political pressures from the Trump administration and notes stable bond markets as a sign of public trust. Kashkari also slightly increased his long-term federal funds rate outlook while advocating for strategic rate cuts to address labor market risks. Overall, his dovish outlook reflects concern over economic uncertainties and a prioritization of employment stabilization.