2026-01-05 17:06:56

FED KASHKARI: INTEREST RATES NEAR NEUTRAL LEVEL, WHO IS SLOWING DOWN HIRING

🔹 Minneapolis Fed President Neel Kashkari believes the Fed is very close to the neutral interest rate, which is the level that neither stimulates nor restrains growth, so no need for further cuts

🔹 The current interest rate is around 3.5%–3.75%, only about 0.5% away from the Fed's estimated neutral level
➤ This means the Fed may only need to cut about 1–2 more times to reach the neutral level

🔹 Kashkari emphasized that the Fed is balancing between still-high inflation and a slowing labor market
➤ Core inflation is currently around 2.8%
➤ The unemployment rate has risen to 4.6%

🔹 He warned that inflation risks could persist for many years, especially due to the impact of President Trump's tariffs

🔹 Regarding the labor market, Kashkari said AI is causing large companies to slow down hiring, as they have already started to see real productivity increases
➤ The trend is fewer new hires but also fewer layoffs, making it harder for those who lose jobs to find new ones
➤ This impact is more pronounced in large corporations and less so in small businesses#CryptoMarketRebound

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