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Minnesota Federal Reserve President Neel Kashkari said Friday he expects to see interest rates lower this year if the economic data continue to move in the same direction. In a CNBC interview, the central bank official expressed confidence that inflation will continue to drift down to the Fed’s 2% target, while Friday’s nonfarm payrolls report showed the labor market continues to look strong. “Ultimately, our job is maximum employment and stable prices. If we see very good data on the inflation front while the labor market stays strong, then I think that would move me towards supporting easing further,” Kashkari said on “Squawk Box.” “I don’t know why we’d have to keep rates where they were if we really saw inflation coming down quickly.” Headline inflation in December ran at a 2.6% annual rate, according to the Fed’s preferred personal consumption expenditures price index. Excluding food and energy, core inflation was a bit higher, at 2.8%. That’s still considerably above the central bank’s 2% goal, though Kashkari said he expects housing-related data, particularly on rents, to ease through the year and eventually bring prices back to target. Kashkari is not a voter this year on the rate-setting Federal Open Market Committee but will vote in 2026. “We will get inflation down to 2%. We’re committed to that,” he said. However, Kashkari’s colleagues in recent days have expressed some concern over what fiscal policy could do to the inflation picture. President Donald Trump has pushed aggressive tariffs against the largest U.S. trading partners, and some economists worry that they could reignite inflation if they trigger a trade war. “We’ll have to see where what that uncertainty looks like. What’s the range of the negotiation that’s taking place?” he said. “Obviously tariffs are hard, because it’s not simply what we do in…

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Filed under: News - @ February 7, 2025 3:27 pm