Will the Fed Cut Rates Before September? Uncertainty Looms, Says Official

Minneapolis Federal Reserve President Neel Kashkari expressed uncertainty about interest rate adjustments before September, citing major shifts in U.S. trade and immigration policies under the Trump administration.

In a Monday interview with Bloomberg Television in Tokyo, Kashkari said, “Anything’s possible, but will we have enough clarity by September? I’m not sure yet. We’ll need to see how the data comes in and how trade talks progress.” He noted that a trade deal in the coming months could provide much-needed clarity for the Fed’s decision-making.

Despite a strong U.S. economy in early 2025, President Trump’s tariff proposals and sweeping immigration policy changes are prompting businesses to rethink investment plans. A full rollout of tariffs could drive up inflation while slowing economic growth, as companies scale back investments and consumers tighten spending.

Kashkari, who does not have a vote on the Federal Open Market Committee this year, and Chicago Fed President Austan Goolsbee, who does, both indicated that the threshold for near-term rate cuts remains high. “This uncertainty could weigh on economic activity, making it tough to chart the right course for monetary policy,” Kashkari said.

Other Fed policymakers echoed this cautious stance over the past week, signaling they may hold off on rate changes for months as they assess the impact of tariffs and related measures. Adding to the uncertainty, Trump recently threatened 50% tariffs on EU imports, later delaying them until July 9. He also warned of a potential 25% tariff on products like smartphones manufactured abroad by companies such as Apple and Samsung.

As trade negotiations and policy shifts unfold, the Fed faces a complex landscape in balancing growth and inflation. For now, officials are keeping a close eye on the data—and the headlines.