Scripps News: All eyes on the Fed as interest rate cuts have yet to materialize

April 9, 2024

Last week, Minneapolis Fed president Neel Kashkari sparked a frenzy after suggesting rate cuts may be off the table if there's no progress on inflation. He clarified his comments during a Q&A at the University of Montana in Missoula on Monday night.

"What I said was, my best-case scenario is that inflation will continue to fall this year and I jotted down in March that we would have two interest rate cuts over the course of this year," he said. "Then I explained if we don't see any progress on inflation and inflation moves sideways, then that would make me question, 'Why would we cut interest rates?'"

He added, "I think it's unlikely we would raise interest rates from here, but I don't want to rule it out. If inflation surprises us on the upside, that's always possible."

Kishore Kulkarni, an economist with Metro State University of Denver, says all eyes will be on Wednesday's Consumer Price Index Report, which measures inflation by tracking the overall change in the cost of goods.

"Now, if the economy is doing very well again, lowering the interest will make higher demand for loans and that will probably put pressure on inflation in the future," he told Scripps News.

The next Fed meeting is set for April 30, with six more chances for a rate cut this year.

Experts say in the meantime, work on your credit score and get ready to re-finance your mortgage, in case rates are slashed.