Fed Officials Discuss Future Interest Rate Cuts

Federal Reserve officials, including Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari, are advocating for a cautious approach to further interest rate cuts, emphasizing the risk of reigniting inflation. Logan noted recent progress in reducing inflation but highlighted uncertainty around the number and timing of future cuts, suggesting the Fed is currently at the neutral rate of interest. Meanwhile, Kashkari warned that unexpected inflation data could impact decisions at the upcoming December meeting, particularly as core inflation remains elevated due to housing costs. Financial markets are anticipating another quarter-point rate cut in December, but this is contingent on upcoming CPI data, which is expected to show a slight rise in inflation. As the Fed navigates these economic waters, analysts are adjusting their expectations for future rate cuts, especially considering potential economic policies from President-elect Trump that could influence inflation. Investors in callable CDs are also feeling the impact of the Fed's rate cuts, with many seeing reduced yields as banks adjust to the new rate environment.