Fed's Kashkari: Did Not Support Last Month's Rate Cut, Adopts Wait-and-See Stance for December Decision

Minneapolis Fed President Neel Kashkari stated that he did not support the Fed's decision to cut interest rates last time but remains in a wait-and-see mode regarding the best course of action for the December meeting.

He said on Thursday, "Based on the anecdotal evidence and data we're getting, the underlying resilience in economic activity has been stronger than I expected." He believed this indicated that the Fed should have paused rate cuts at the October meeting. Since then, available data shows the economic situation has "remained largely unchanged."

Regarding the upcoming December interest rate decision, he said, "I can make a case for cutting rates based on the data trajectory, and I can also make a case for holding steady. We'll have to wait and see." After the September meeting, Kashkari had said he expected two more rate cuts in 2025.

Kashkari mentioned that at the time, he thought the economy was showing more significant signs of slowing down. He said, "There were many reports about low-income borrowers being in distress, so it seemed there were indeed some vulnerable areas in the labor market. But many companies reported good earnings, and many are optimistic about 2026."