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Fed's Kashkari Says Inflation Still Too High Across US Economy
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In Short: Minneapolis Federal Reserve President Neel Kashkari stated on Sunday that inflation remains too high across all sectors of the US economy, not just in rising oil prices, according to Reuters.
Minneapolis Federal Reserve President Neel Kashkari stated on Sunday that inflation remains too high across all sectors of the US economy, not just in rising oil prices, according to Reuters. Kashkari emphasized that when inflation exceeds the Fed’s 2% target, it necessitates raising interest rates to curb borrowing costs.
Kashkari expressed hope for support from other parts of the government and the real economy, noting the American economy's resilience despite ongoing conflicts. He also acknowledged that the bond market is the Treasury’s responsibility and that the labor market remains robust.
The FXS Fed Sentiment Index, which is elevated despite a slight decline, aligns with a stable FXS Speechtracker score, indicating that Fed communication under Kashkari continues to lean hawkish. This stance reflects a bias toward tighter policy due to resilient growth and a strong labor market.
Despite the ongoing challenges, Kashkari’s comments underscore the Fed’s commitment to addressing inflationary pressures across the board, reinforcing the message that the central bank can remain patient but not complacent.
What this adds
The report adds context on the impact of inflation on borrowing costs and the Fed's hawkish stance, which is consistent with the current economic resilience and labor market strength.
What's still developing
- USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00.