Investing.com– Federal Reserve Bank of Minneapolis President Neel Kashkari told Bloomberg TV on Monday that it was still appropriate to consider another quarter-point interest rate cut in December.
Kashkari said policymakers were still considering a 25 bps rate reduction in the Fed’s final meeting for the year. “It’s still a reasonable consideration,” he told Bloomberg TV.
“Right now, knowing what I know today, still considering a 25-basis-point cut in December — it’s a reasonable debate for us to have.”
Kashkari’s comments come amid some doubts over whether the Fed will cut rates again in December, especially as recent economic readings showed stickiness in inflation and resilience in the U.S. economy. The labor market was also seen running strong in recent weeks.
Fed Chair Jerome Powell had struck a cautious note during a recent address, sparking more doubts over a December cut, which will bring the Fed’s total rate cuts to 1% in 2024.
Traders were seen pricing in a 61.3% chance for a 25 basis point cut in December, and a 38.7% chance rates will remain unchanged, according to CME Fedwatch.