Overview
- Minneapolis Fed President Neel Kashkari said policy is "pretty close to neutral" and the central bank is nearing the point to stop lowering rates.
- He emphasized that inflation remains too high, warning tariff effects could linger for years and expressing skepticism about some recent inflation data due to shutdown-related measurement issues.
- Kashkari described a cooling labor market with wage growth easing and cautioned the unemployment rate, around 4.6%, could "pop" higher.
- The federal funds target stands at 3.50%–3.75%, roughly half a percentage point below the FOMC’s estimated neutral level from December projections.
- Futures pricing reported by investingLive shows just over a 50% chance of a March cut and about 58 basis points of 2026 easing, as attention also shifts to President Trump naming Jerome Powell’s successor this month.