The Federal Reserve is holding steady on monetary policy as it assesses the economic impact of tariffs, according to Minneapolis Fed President Neel Kashkari.
Speaking at an event in Wisconsin, Kashkari acknowledged that recent inflation data has been “quite positive,” with the Fed’s preferred inflation measure dropping to 2.1% in April. However, he emphasized that the central bank needs more time to understand the full effects of tariffs on prices before adjusting interest rates.
This cautious stance aligns with Fed Chair Jerome Powell’s recent testimony to Congress, where he indicated no rush to lower rates. Fed officials are currently split on whether rate cuts will occur this year, with their forecasts showing inflation potentially rising back to 3% by year-end despite recent improvements.