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Minneapolis Federal Reserve President Neel Kashkari stated that he anticipates a decrease in the pace of interest rate cuts following last week’s half percentage point reduction. Kashkari expressed that he believes smaller steps will be taken going forward unless there are significant changes in the data. The Federal Open Market Committee’s decision to reduce its benchmark rate by 50 basis points was seen as necessary to recalibrate policy from focusing on Inflation to addressing concerns about a softening labor market. Kashkari’s comments suggest a shift back to traditional quarter-point increments for rate adjustments.
The 50 basis point rate cut signaled the Fed’s progression towards normalizing rates and moving them back to a neutral position. Other Fed officials such as Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee also shared their perspectives on the situation, with Bostic expressing a more aggressive approach to returning to a neutral rate and Goolsbee foreseeing a continuous path of rate cuts to balance the risks to the Fed’s dual mandate of low Inflation and full employment. Market projections indicate a potential 0.75 percentage point reduction by the end of the year, with expectations of both quarter- and half-percentage point cuts at upcoming FOMC meetings.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
