Kashkari's Rate Hike Push Faces Growing Resistance Amid Soft Jobs Data

Federal Reserve Bank of Minneapolis President Neel Kashkari is advocating for higher interest rates to restrain the economy, despite soft jobs data.

Kashkari's push for a measured tightening cycle is met with skepticism as recent labor market figures show weaker hiring and stressed housing markets.

State Street's chief economist Simona Mocuta notes that housing starts have dropped to their lowest level in five years, while rental vacancies reached their highest point since 2017. She expects shelter-rent inflation to slow to 3.2% this year from 3.7% in 2025.

Harvard professor Jason Furman suggests that interest rates may already be above neutral, implying policymakers have 'a little bit of a foot on the brake pedal.'