Minneapolis Fed President Neel Kashkari was on CNBC today with a mix of comments that lean into the soft-landing narrative, though he’s flashing a warning sign on jobs.
- Inflation is slowly trending down
- Not concerned about risk of Fed bank presidents being fired
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Would love to see Powell remain as a colleague for as long as he likes
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Have no idea if Powell stays on after Chair term ends
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My expectation is low hiring but low firing
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Wage growth is slowly tending down
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Lot of confidence housing services inflation is coming down
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Expect economy to remain resilient
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Inflation is slowly trending down
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There is a risk the unemployment rate can pop from here
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My guess is we’re close to neutral now
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Inflation is still too high
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Job market is clearly cooling
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Lower-to-middle income anxiety is about inflation
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K-shaped economy rings true
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AI is a story for big companies, not small ones from what I hear
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We’re approaching a kind of equilibrium on the tariff front
While he notes “low hiring but low firing,” he explicitly flagged a risk that the unemployment rate could “pop” from here. He sees the market as “clearly cooling” with wage growth trending down.
He also waded into an interesting debate on Powell, who has the option to stay on as a Fed governor after his term ends. He floated some soft support, though said he has ‘no idea’ if that’s the plan.
Fed funds pricing is just over 50% for a cut at the March 18 meeting, while a pause in January is largely priced in. A total of 58 bps of easing is priced in for the year ahead. There’s been no market reaction to these headlines and today’s trading will largely be driven by flows as the new year really kicks off.
The highlight on today’s economic calendar is the ISM manufacturing survey at 10 am ET (1500 GMT).
