The Federal Reserve is expected to cut interest rates in December and continue this recent trend into the New Year with four additional cuts. This isn’t a guarantee, however, according to the president of the Federal Reserve Bank of Minneapolis Neel Kashkari.
“We have to see what the data says,” Kashkari tells Yahoo Finance senior Fed reporter Jennifer Schonberger at the 2024 Yahoo Finance Invest.
Kashkari and his fellow central bank officials have been surprised by the resilience of the US economy despite the ramp up in rates in recent years, leading him to believe it could reflect a higher neutral rate environment.
“If we are in a structurally higher productivity environment, that would tell me we have less room to cut until we eventually get back to neutral, says Kashkari. “I'm not saying we're very close to neutral right now, but when we think about the destination, we may not go down as far.”
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This post was written by Luke Brooks.