A senior official from the Federal Reserve wrote: Support cutting interest rates by another 50 basis points this year!

Minneapolis Fed President Kashkari stated in an article that he supports the significant rate cut by the Fed last week and supports another 50 basis point cut before the end of the year. Kashkari wrote in an article published on his bank's website on Monday that inflation has cooled significantly, approaching the Fed's 2% target. He wrote, "At the same time, signs of weakness are emerging in the labor market." "The risk balance has shifted from higher inflation to further weakness in the labor market, making it necessary to lower the federal funds rate," Kashkari wrote. His comments came after Fed policymakers decided to cut rates by 50 basis points last week, a proactive shift from combating inflation to supporting the labor market. The median forecast released by Fed officials last week is for another 50 basis point cut in the remaining two meetings this year. Although Kashkari is not a voting member of the Federal Open Market Committee (FOMC) this year, he participates in monetary policy discussions. On September 20, Fed Governor Waller stated that unexpectedly favorable inflation data in recent weeks prompted him to support a 50 basis point cut. This contrasts with Governor Bowman, who stated last Friday that she voted against the decision as she remains concerned about inflation being above target. Bowman became the first Fed governor to vote against a rate action since 2005. Kashkari noted that while there is uncertainty about the underlying strength of the U.S. economy, growth and consumer spending remain strong. He also mentioned that the neutral rate of Fed policy, which neither restrains nor stimulates the economy, may have risen. Kashkari wrote, "The longer this economic resilience lasts, the more I believe that the temporary rise in the neutral rate may actually be more structural." He expects the long-term federal funds rate to be around 2.9%, higher than his forecast of 2.5% in March. All Fed officials have also raised their median estimate of this rate, with the "dot plot" released last week showing officials' estimate of the neutral rate has risen from 2.5% a year ago to 2.9%. Since the Fed began actively tightening policy to curb inflation in 2022, Kashkari has published a series of articles. In a previous article written in May, he suggested that policymakers may keep rates at current levels "for a while" until they are confident that inflation is moving towards their target. Atlanta Fed President Bostic also stated on Monday that the Fed's rate cut cycle starting with significant cuts will help bring rates closer to neutral levels as the risks between inflation and employment become more balanced