Minneapolis Federal Reserve President Neel Kashkari said Monday that he thinks the central bank is close to the point where it should stop lowering interest rates.
In a CNBC interview, the central banker said the key calculus now is whether the Fed should be more focused on a slowing labor market or stubbornly high inflation.
“My guess is we’re pretty close to neutral right now,” Kashkari said in a live CNBC “Squawk Box” interview. “We just need to get more data to see which is the bigger force. Is it inflation or is it the labor market? And then we can move from a neutral stance, whatever direction is necessary.”
Calibrating neutral is critical for Fed policymakers as a divided group decides whether to continue the streak of three consecutive rate cuts implemented in the latter part of 2026 or hold pat as policymakers watch economic conditions unfold.
The key federal funds rate is currently targeted in a range between 3.5%-3.75%. According to projections made at the December meeting, that’s only about half a percentage point from the committee consensus on the neutral rate, or one that neither supports nor restrains growth.
