Fed policy rate likely 'modestly lower' at end-2025 than now, Kashkari says

Feb 7 (Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Friday said that if inflation drops further this year as he expects, he would support cutting interest rates so that they are "modestly" lower by the end of the year than where they are now, barring some big surprise with tariffs or other policies of the Trump administration.

"If we see very good data on the inflation front while the labor market stays strong, then I think that would for me move me towards supporting easing further -- I don't know why we have to keep rates where they were if we really saw inflation coming down," Kashkari told CNBC in an interview after the Labor Department said the unemployment rate fell to 4%, which Kashkari said was the most important bit of data from the monthly jobs report.

For now, though, the Fed can keep rates on hold until there is more clarity on tariffs, immigration, and tax policy, he said.