The Minneapolis Fed president favored a 25-basis-point increase in July, but markets read his latest comments as support for pauses or only small policy adjustments.
Neel Kashkari said he is not pushing for a significant rise in interest rates, reinforcing a cautious, data-dependent message as the Federal Reserve weighs its next move. The Fed left the federal funds target range at 3.50% to 3.75% in July even though Kashkari preferred a 25-basis-point (0.25 percentage point) increase, and markets are reading that backdrop as more consistent with pauses or small adjustments than aggressive tightening. Pricing suggests a rate cut is being considered for upcoming meetings, though not strongly anticipated, leaving investors focused on future Federal Open Market Committee (FOMC, the Fed's rate-setting panel) meetings, comments from Chair Kevin Warsh, and incoming U.S. inflation and employment data for signs the Fed could shift from its current cautious stance.