“Even after the 50 basis-point cut, I believe the overall stance of monetary policy remains tight,” Kashkari wrote, emphasizing the need for further evaluation of economic conditions before moving forward with additional cuts.
“I was comfortable taking a larger first step, and then as we go forward, I expect, on balance, we will probably take smaller steps unless the data changes materially,” Kashkari said, outlining his cautious approach to future rate cuts.
Kashkari is indicating a preference for gradual rate reductions, stating, “FOMC members are likely prepping investors for a steady pace of cuts for the next several meetings,” reflecting a more measured response to economic indicators.
The Sept. 18 rate cut was unexpected in its size, with Powell explaining that the larger cut was justified by noticeable inflation decreases and slight increases in unemployment, highlighting the Fed's responsive approach.
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