On Monday (October 14th) local time, Minneapolis Federal Reserve President Kashkari stated that it may be appropriate to continue with moderate rate cuts in the coming quarters.

The Federal Reserve announced a 50 basis point rate cut last month, lowering the target range for the federal funds rate to 4.75%-5.00%, initiating the much-anticipated easing cycle.

The market had previously expected the Federal Reserve to continue cutting rates by 50 basis points in November, but with the strong performance of the U.S. non-farm data in September, coupled with the CPI exceeding expectations, investors are now betting that policymakers will cut rates by 25 basis points at that time.

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Kashkari attended a meeting held by the Central Bank of Argentina in Buenos Aires on Monday, where he said in his speech: "For now, it seems appropriate to further moderately lower the policy interest rate in the coming quarters to achieve our dual mandate."

Kashkari said: "Ultimately, the direction of policy will be driven by actual economic, inflation, and labor market data."

As required by the U.S. Congress, the Federal Reserve's monetary policy must focus on two major tasks: achieving full employment while maintaining price stability, known as the dual mandate.

Kashkari stated that the current monetary policy stance remains restrictive, but the degree of restriction is still unclear.

He said that the Federal Reserve is in the final stage of bringing inflation down to the 2% target, inflation has fallen significantly from its peak, but it is still slightly above the target of policymakers.

The U.S. August personal consumption expenditure (PCE) price index rose by 2.2% year-on-year, and the core PCE price index, which excludes volatile factors such as food and energy, rose by 2.7% year-on-year. As the inflation indicator favored by the Federal Reserve, the PCE data has been getting closer and closer to the policymakers' 2% target.

Regarding the recent labor market data, Kashkari commented that the labor market remains strong and is not on the verge of a rapid slowdown.In September, the United States saw an addition of 254,000 jobs in the non-farm sector, marking the largest increase in six months. The unemployment rate unexpectedly dropped from 4.2% to 4.1%, while average hourly earnings rose by 0.4% month-on-month and 4% year-on-year.

Before the U.S. inflation reached its highest level in 40 years in 2022, Kashkari was one of the most dovish officials at the Federal Reserve, focusing more on the job market than on inflation. However, he later became one of the more hawkish officials, showing greater concern about inflation risks.

As U.S. inflation continues to recede, Kashkari has previously stated that he is satisfied with a 50 basis point rate cut in September, and that the Federal Reserve cutting rates by 25 basis points at each of the remaining two meetings this year would be a "reasonable starting point."