Minneapolis Fed President Kashkari Sees Two Rate Cuts Amid US Economic Slowdown

Minneapolis Fed President Neel Kashkari indicated that two interest rate cuts this year remain reasonable in response to the slowing U.S. economy, although uncertainty about the inflationary impact of tariffs persists. He emphasized that the Federal Reserve needs to begin adjusting rates in the near term while closely monitoring inflation and labor market data, noting declining wage growth as a sign of cooling. Meanwhile, investment strategist Jeffrey Gundlach expects the Fed will likely cut rates at its upcoming meeting due to a significant downward revision in jobs data, with the possibility of three cuts this year now on the table. Gundlach further anticipates that easier monetary policy will lead to a rally in stocks, a softer U.S. dollar, and a steepening of the Treasury yield curve. Both Kashkari and Gundlach highlight the importance of labor market trends and inflation data in shaping the Fed's policy moves amid economic uncertainties. These perspectives reflect growing expectations of monetary easing to support economic growth amid mixed signals on inflation and employment.