Fed's Kashkari calls crypto “basically useless," says AI is still being tested in most businesses

Neel Kashkari says AI is useful, but crypto is just gambling. That was the tone of his latest comments during a live virtual event where the Minneapolis Fed president went through everything: inflation, interest rates, jobs, housing, digital assets, and more.

“My outlook for the U.S. economy is one of pretty good growth going forward,” Kashkari said. He added that inflation is “heading down,” though whether it gets to 2.5%, under that, or more, is still unclear. “I don’t know,” he admitted.

Even with inflation still above the Fed’s 2% goal, Kashkari said it’s going in the right direction. He doesn’t expect a surge. He feels best about housing, where prices are showing signs of cooling. He also described the overall economy as “quite resilient,” noting it hasn’t slowed as much as people thought it would. But he called the recovery “K-shaped,” with some parts doing fine and others not.

Kashkari rejects QE, says crypto has no consumer use

On monetary policy, Kashkari made it clear that he doesn’t think the Fed’s current strategy is loose. He pushed back at the idea that recent balance sheet growth is another round of quantitative easing.“I don’t see a need for quantitative easing,” he said.

Just because the balance sheet is expanding doesn’t mean it’s QE, he argued.

Talking tariffs, Kashkari said the effects on prices haven’t been as bad as expected. But he warned that another price hit from new tariffs is possible. “They haven’t been the gut punch many feared,” he said, “but their long-term impact is still unfolding.” That part remains a question mark.

He also mentioned unemployment is dropping, which he welcomed. But he reminded everyone that the Fed has to balance both sides of its job; price control and employment. “They’re in tension with each other,” Kashkari said. That tension makes the job harder. As for consumers, he said people are still doing okay financially.

“Households have pretty good balance sheets,” and nothing looks “very alarming” in terms of borrowing. The real issue has been inflation, according to him.

Switching gears, Kashkari addressed technology. He said AI is mostly still in the test phase inside companies. It hasn’t led to major layoffs yet. He also dismissed cryptocurrency entirely. “It’s basically useless” for regular people, he said, with no hesitation.

On housing, he didn’t comment on Trump’s plans for mortgage bonds. But he did point to a bigger issue: supply. “That’s the biggest barrier” in housing, according to him.

He wrapped it all up by defending the Fed’s independence. “We all believe an independent central bank makes the best policy,” Kashkari said. He added that officials will keep making decisions based on what’s best for the country.

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