Minneapolis Federal Reserve President Neel Kashkari said Monday that he expects policymakers to dial down the pace of interest rate cuts after last week's half percentage point reduction.

"I think after 50 basis points, we're still in a net tight position," Kashkari said in a CNBC "Squawk Box" interview. "So I was comfortable taking a larger first step, and then as we go forward, I expect, on balance, we will probably take smaller steps unless the data changes materially."

In a decision that came as at least a mild surprise, the rate-setting Federal Open Market Committee on Wednesday voted to reduce its benchmark overnight borrowing rate by half a percentage point, or 50 basis points. It was the first time the committee had cut by that much since the early days of the Covid pandemic, and, before that, the financial crisis in 2008. One basis point equals 0.01%.

While the move was unusual from a historical perspective, Kashkari said he thought it was necessary to get rates to reflect a recalibration of policy from a focus on overheating inflation to more concern about a softening labor market.

His comments indicate the central bank could move back to more traditional moves in quarter-point increments.

"Right now, we still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market, and a lot of the recent inflation data is coming in looking very positive that we're on our way back to 2%," he said.

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