Federal Reserve's Kashkari: Large-scale expulsions of illegal immigrants will lead to chaos for some businesses; unclear impact on inflation
Minneapolis Federal Reserve President Neel Kashkari stated that the large-scale expulsion of illegal immigrants in the U.S. could disrupt some businesses, and the impact on inflation remains unclear. He pointed out that losing employees could lead to chaos for companies. The Federal Reserve lowered the benchmark interest rate by 25 basis points last week and is expected to cut rates again at the December meeting. Kashkari emphasized that the inflation rate needs to drop to the 2% target, with the latest data showing that the inflation rate in September was 2.4%
According to the Zhitong Finance APP, Minneapolis Federal Reserve President Neel Kashkari stated on Sunday that the large-scale deportation of illegal immigrants in the United States could disrupt some businesses, and it remains unclear how the outflow of immigrant labor will affect inflation.
Kashkari mentioned, "If you just assume that people are working—whether on farms or in factories—and those businesses are now losing employees, that could cause some chaos."
Former President Trump promised to deport millions of illegal immigrants during his campaign that ended last week.
"I'm not entirely sure what impact this will have," he added. "Ultimately, the business community, Congress, and the administration will have to discuss how to adjust."
Meanwhile, the Federal Reserve lowered the benchmark interest rate by 25 basis points to 4.5% to 4.75% as expected last Thursday.
Kashkari indicated that the Federal Open Market Committee (FOMC) is currently expected to cut rates again by 25 basis points at its next meeting in December, but "we need to see the actual data" before making a decision.
Kashkari stated, "We want to be confident that inflation will fall all the way to the 2% target." The latest data shows that the inflation rate in September was 2.4%. The report for October will be released on Wednesday, and inflation is expected to remain stable.
Kashkari is not a voting member of the FOMC this year.
He noted that the impact of the tariffs on imported goods and tax cuts threatened by Trump during the campaign will depend on further clarification and other factors, including how other countries respond to these tariffs.
Kashkari stated that tariffs could lead to a one-time increase in prices but would not affect inflation.
However, "if both sides are at odds, challenges arise," he said. "If one country imposes tariffs and then other countries respond, the situation escalates... We will have to wait and see what measures are taken and how other countries will respond. Right now, we are all just guessing."