Fed Official Kashkari Backs Two Rate Cuts in 2025; Rate Cut Odds Hit 93%

Federal Reserve Bank of Minneapolis President Neel Kashkari has signaled support for interest rate cuts as economic data points to a slowdown. In a CNBC interview, Kashkari emphasized the need for timely action, citing weakening jobs figures and softening growth. The CME FedWatch Tool now places a 93% probability on a September rate cut.

Kashkari, a 2025 voting member of the Fed's rate-setting committee, suggests two cuts this year remain plausible. However, he cautioned that unexpected inflationary pressures from new tariffs could force the Fed to pause or reverse course. His stance aligns with other policymakers advocating monetary easing to counter economic headwinds.

The growing consensus for rate cuts comes as the Fed balances slowing growth against persistent inflation risks. Market participants now await the September meeting for clarity on the central bank's next move.