(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said the US economy has remained remarkably strong as the central bank progressed in beating back inflation, but the Fed was still “not all the way home.”
“We need to finish the job,” Kashkari said Sunday on CBS’s Face the Nation. “We want to have confidence that inflation is going to go all the way back down to our 2% target.”
The Fed lowered interest rates by a quarter percentage point on Thursday, its second consecutive cut. On Saturday, Kashkari said that a strong economy and higher productivity growth could lead policymakers to reduce rates less than previously expected over the coming months.
In September, officials projected that one more quarter-point reduction before the end of the year is likely, which Kashkari reiterated on Sunday. “Another rate cut is certainly possible” in December, he said.
President-elect Donald Trump has pledged to conduct a mass deportation of illegal migrants, prompting questions about how the US economy and labor market may be affected.
Kashkari said deportations could cause “disruption” to some US businesses, while it’s unclear how an exodus of migrant labor could impact inflation.
The Minneapolis Fed chief emphasized it’s too early to determine how potential policies from the incoming administration and the new Congress could affect the economy and rate trajectory.
“There’s just so much uncertainty about what the actual policies will be, what will get passed in the Congress, how it will be implemented,” Kashkari said. “We at the Fed will simply wait. We have to wait and see what the rest of the government decides to do before we analyze what it means for the economy.”
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