Fed official: U.S. economy more resilient than expected – InForum

FARGO — The U.S. economy is performing well followning a year of major changes in U.S. policy.

That’s according to Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, who was in the Fargo-Moorhead area last week to take part in the 2026 Midwest Economic Outlook Summit in Thursday, Feb. 19, in West Fargo.

Kashkari was the keynote speaker at the event.

The day before the summit, Kashkari, whose job includes helping guide monetary policy and interest rates, shared highlights of subjects he planned to talk about at the summit.

“Overall, the U.S. economy is performing quite well,” Kashkari said, adding that the economy has been more resilient than officials expected it to be as recently as a year ago.

That resilience, he noted, seems to be continuing when it comes to things like gross domestic product and consumer spending, as well as employment and inflation.

The latter, he added, has been dropping, but still has not reached the Fed’s long-term inflation target of 2%.

“We’ve seen tremendous policy changes over the last year — immigration policy changes, tax policy changes, tariffs and trade policy changes — and yet the U.S. economy has seemed to power through all of that,” Kashkari said.

On the subject of workforce, something the region has struggled with for years, Kashkari said there are signs the situation is improving and businesses are feeling better about worker availability than they have in a long time.

Kashkari said one agriculture-sector company recently told him that for the first time in 15 years officials are feeling like the business is fully staffed.

On tariffs, Kashkari said it remains unclear whether the effects of tariffs on trade have been fully felt, but he added there are indications at least one U.S. crop market is improving.

“It is getting better,” he said, adding that China is again buying American soybeans.

The change is not as large as growers might have hoped for, “but it is having a material impact,” Kashkari said.

Regarding the region’s retail market, Kashkari said it appears foot traffic from Canada is down.

“I heard that loud and clear,” he said, citing the likely reasons: “It’s tariffs and it’s just geopolitics.”

On consumer spending in general, Kashkari said the picture is two-fold: a strong stock market appears to be inspiring spending by higher-income households, while lower-income consumers are exhibiting recession behavior, like switching to lower-cost brands to help make ends meet.

“The vast majority of Americans who want to work are working, they have not lost their jobs. And yet, there is a lot of economic pessimism at the same time,” Kashkari said.

“So, why are people feeling pessimism? I think they’re mostly feeling pessimism because they’re feeling the lingering effects of inflation,” Kashkari said. “They still have their jobs, but their money is not going as far as it used to go, or as far as they’d like it to go,” he added.

On interest rates, Kashkari said his recommendations regarding what should happen with the federal funds rate — which influences things like prime rates and mortgage rates — will depend on what happens with inflation and labor markets.

“I feel like right now, monetary policy is in a pretty good place to just sit here and wait,” Kashkari said.