Investing.com -- Federal Reserve’s Neel Kashkari addressed the Detroit Lakes Chamber Economic Summit, where he discussed the impact of tariffs and the potential for further reduction in U.S. interest rates in the next year or two.
Kashkari expressed his concern over the uncertainty surrounding tariffs, stating that the shift in sentiment is largely due to the tariff situation.
"This is the most dramatic shift in confidence in the last decade, save for the COVID era," he said.
He suggested that the effect on confidence could be more significant than the impact of the tariffs themselves. Kashkari also emphasized the seriousness of this hit to confidence, noting that its duration could enhance its significance.
Despite the uncertainty, Kashkari also conveyed some optimism. He suggested that resolutions of trade uncertainty could restore confidence quickly. However, he remained uncertain about the overall effects of tariffs.
In terms of monetary policy, Kashkari indicated that there might be a balance between the forces on interest rates from tariffs, suggesting that the current position should be maintained.
He also hinted at the possibility of further reductions in U.S. interest rates in the coming one or two years.