Federal Reserve officials: Interest rates may be further reduced in the coming quarters!

Minneapolis Fed President Kashkari said on Monday that as the 2% inflation target gradually emerges, it seems possible that the Federal Reserve's benchmark interest rate could be "further moderately reduced" in the coming quarters. Speaking at a conference hosted by the Central Bank of Argentina, Kashkari said, "It seems appropriate at this point that a moderate reduction in our policy rate over the next few quarters may be warranted to achieve our dual mandate." He added, "Ultimately, the path of future policy will depend on actual economic, inflation, and labor market data." Core inflation in the United States in September came in higher than expected, and the latest U.S. labor market data showed a decrease in the unemployment rate with hiring remaining strong. These data led investors to retract their bets that the Fed would cut the benchmark rate by another 50 basis points at the November meeting. Kashkari stated that the current federal funds rate target range is between 4.75% and 5%, and monetary policy still remains restrictive to economic growth, but the extent of the restriction is not yet clear. Kashkari noted that the labor market remains strong, with the latest employment report indicating that " a rapid deterioration in the labor market does not appear imminent". He added that inflation "has come down significantly from its peak but remains slightly above our target, and the Fed is going through the final stages of bringing inflation down to the 2% target." Kashkari previously expressed satisfaction with the Fed's 50 basis point rate cut in September, and stated that cutting rates by 25 basis points at each of the Fed's remaining two meetings this year is a "reasonable starting point". According to the median estimate released last month, Fed policymakers expect the Fed to cut rates by a total of 50 basis points within the remaining time of 2024. The CME Group's FedWatch Tool shows that federal funds futures are still pricing in an 84.1% probability of a 25 basis point rate cut at the November meeting. This is down from 97.4% a week ago