Fed’s Kashkari Sees Two to Three Rate Cuts as Appropriate in 2024

Federal Reserve Bank of Minneapolis President Neel Kashkari said officials need to see “a few more months” of inflation data before cutting interest rates, adding that he thinks two to three cuts will likely be appropriate for 2024.

“We’re not looking for better inflation data, we’re just looking for additional inflation data that is also at around this 2% level,” Kashkari said Wednesday on CNBC. “If we get to see a few more months of that data, I think that will give us a lot of confidence.”

He also said the labor market will dictate the speed at which the Fed lowers interest rates, noting if the jobs market remains strong, it will give the central bank the flexibility to move slowly. Kashkari’s projection of two to three rate cuts is slightly more hawkish than December’s median estimate among policymakers for three quarter-point reductions, though markets are pricing in as many as five cuts.

Kashkari, who does not vote on monetary policy decisions this year, wrote in an essay published earlier this week that Fed officials have time to assess incoming data before lowering rates, citing changes in the post-pandemic economy.