Minneapolis Fed President Neel Kashkari said it was appropriate to discuss a possible US interest rate cut in September. due to the growing possibility of a weakening labor market, The Wall Street Journal reported Monday.
“The balance of risks has changed, so the debate about a possible rate cut in September is appropriate”Kashkari told WSJ in an interview.
Kashkari’s comments come after St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bosticmade comments that pointed toward a rate cut next month.
Kashkari said inflation was picking up but the labour market was showing “worrying signs”according to WSJ.
However, Kashkari said he saw no reason to cut interest rates by more than a quarter of a percentage point because layoffs remained low. and applications for unemployment benefits did not suggest a notable deterioration.
Investors, who had previously been betting that the Federal Reserve would have to cut rates by half a percentage point at its meeting on September 17-18 after weaker-than-expected labor market data,now project a quarter-point cut next month is roughly 75% likely following encouraging data on inflation, jobless claims and retail sales.
