Fed's Kashkari: September Rate Cut Possible, Two Cuts This Year

Federal Reserve Policy Outlook

• 🎯 Kashkari anticipates the first potential rate cut in September, maintaining his forecast for two rate cuts this year, though he remains adjustable on this.

Tariff Impact on the Economy

• ⚠️ The impact of tariffs could be delayed or less significant than initially expected, with companies finding ways to adjust supply routes to mitigate higher effective tariff rates.
• 📈 The actual tariff rate is calculated to be closer to 8%, which is triple the current rate but lower than headline figures.
• 🚢 However, the impact could be delayed because only cargo loaded after April 5th is subject to these tariffs, and imports can take 45 days or longer to reach retail shelves.

Monetary Policy Considerations

• 💡 Monetary policy should focus on the actual shock to the economy rather than headline announcements or political statements.
• 🧐 The Fed should not commit to easing policy prematurely, especially if tariff effects are delayed, as they can adjust policy if inflation appears later.