Fed’s Kashkari Supports Two Rate Cuts Amid Economic Slowdown

Fed’s Kashkari Supports Two Rate Cuts Amid Economic Slowdown

Neel Kashkari deems two rate cuts in 2025 suitable as economic indicators signal a slowdown. Market predictions show a 90% chance for a September cut, affecting U.S. Treasury yields and supporting higher valuations in risk assets.

Neel Kashkari, President of the Minneapolis Federal Reserve, indicated that two rate cuts remain appropriate due to slowing economic conditions, with market predictions for a potential September action reaching over 90% according to the CME FedWatch Tool.

Kashkari’s statements focus on potential rate cuts to address declining economic momentum, affecting market expectations and impacting Treasury yields and cryptocurrency valuations .

The Minneapolis Fed President noted that the economic slowdown justifies adjusting the federal-funds rate. Neel Kashkari, President, Federal Reserve Bank of Minneapolis, said to CNBC : “The economy is slowing – and that means, in the near term, it may become appropriate to start adjusting the federal-funds rate.” He added, “A pair of rate cuts by the end of the year seems reasonable to me.”

Rate cut prospects have influenced financial markets, notably by lowering U.S. Treasury yields. Potential rate reductions typically benefit major digital assets like BTC and ETH, increasing their valuation due to liquidity changes.

Kashkari’s outlook affects interest rates, influencing both traditional and emerging markets. These expectations are observed without immediate financial changes, but credible indicators of future cuts are driving investor sentiment.

According to past reductions, similar expectations have previously spurred investments in crypto markets. Reduced interest rates often correlate with higher TVL in decentralized finance, affecting assets like BTC and ETH significantly.

Neel Kashkari’s suggested rate cuts are significant amidst ongoing economic analysis. They reveal potential impacts on financial markets and potentially beneficial conditions for risk assets, especially cryptocurrencies, through improved liquidity and investment flows.