Fed's Response to Economic Slowdown

Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, highlighted the need for the Federal Reserve to address the slowing economy during a recent CNBC interview. He suggested that adjusting the policy rate in the near term could be appropriate, maintaining his expectation for two rate cuts within the year. Kashkari advocated for an early reduction in rates, with the flexibility to pause or increase them later if necessary.

Impact of Tariffs and Trust in Data

While the effect of tariffs on inflation remains unclear, Kashkari noted that businesses have managed to mitigate impacts through anticipatory inventory building. He refrained from commenting on President Donald Trump's dismissal of BLS Commissioner Erika McEntarfer but affirmed his trust in BLS data, stating, "Ultimately, you cannot fake economic reality." He emphasized that the American public's perception of job and inflation data aligns with reality.