A top Federal Reserve official said the central bank may not lower interest rates as expected if it doesn’t see progress on lowering inflation, a statement that raised fear in markets.
Federal Reserve Bank of Minneapolis President Neel Kashkari, one of the voting members of the Federal Open Market Committee, acknowledged that the Fed might not cut interest rates this year as inflation remains stubbornly sticky. That possibility clashes with investors and even the Fed itself, which is predicting coming rate revisions.
“In March, I had jotted down two rate cuts this year if inflation continues to fall back towards our 2% target,” Kashkari said during an event on Thursday. “If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all.”
The two rate cuts he
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