Fed President Neel Kashkari of the Minneapolis Fed said on Sunday that it is a “reasonable prediction” that the Fed will wait until December to lower interest rates.
On CBS’s “Face the Nation” on Sunday morning, Kashkari said that the Fed’s most recent prediction is for only one rate cut this year, which is less than what many economists and investors had been expecting.
‘We’re in a very good position right now to take our time.’
Neel Kashkari
The answer from Kashkari to CBS News’ Margaret Brennan was, “It will really depend on the data.” “Right now we have a great chance to take our time, get more information on inflation, the economy, and the job market, and then we can make a decision.”
According to Bank of America, the one rate cut will happen in December. Brennan asked him more about this.
“You know, I think that’s a pretty good guess,” Kashkari said. He said, “That would probably be near the end of the year” with the one-cut prediction in mind.
Kashkari said that the Fed needs to wait for inflation to drop to its target level of 2%, which is currently around 3%. She also talked about how this will affect housing.
That will let mortgage rates go back to normal once inflation is low enough, he said. “If we just lowered interest rates to encourage people to buy homes right now, the prices of homes would probably go up, and they wouldn’t become more affordable.”
