Fed's Kashkari: Expects Two Rate Cuts Starting in September, May Pause Easing if Tariff Impact Emerges

According to ChainCatcher, citing Jinshi News, Federal Reserve official Kashkari still maintains his view that cooling inflation will allow the Fed to cut rates twice starting in September.

Kashkari also stated that if progress on inflation stalls or reverses, the Fed can pause rate cuts until prices ease again. He noted that tariffs indicate inflation is "very likely to come," as more goods from Asia—the region with the largest tariff increases—will appear on the shelves of U.S. businesses, and companies will eventually begin to pass on the higher costs.

In this scenario, the impact of tariffs on inflation may simply arrive later than expected. Kashkari further noted that economic data so far show "the effects of tariffs on prices, economic activity, or the labor market have been moderate."

He added, "If we cut rates in September and then the impact of tariffs emerges this fall, we should not pursue a preset easing policy, but rather adjust based on new data."