Financial Associated Press, October 7 (Editor Zhao Hao) On Thursday (October 6) local time, Minneapolis Fed President Neel Kashkari said that the Fed has not yet completed the task of reducing inflation. The end of the rate hike cycle is “quite a long way off.”
“We still have more work to do,” Kashkari said. “We’re not ready to announce a pause until we see evidence that inflation has peaked and is expected to come back down. I think we’re still far from a pause. some distance.”
Last year, Kashkari was even a “dovice” among Fed officials, and in the eyes of the outside world, he was the most “dove”. After Kashkari’s speech in the day, some institutions posted a dot plot of the Fed’s meeting on interest rates in September 2021.
The figure shows that at that time, most officials still believed that the central bank would not raise interest rates this year (2022), and even one thought that interest rates would remain near 0% in 2023. The outside world believed that Kashkari made this prediction. .
However, Kashkari took a 180-degree turn at the start of the year, becoming more aggressive on interest rates than most of his colleagues. Although he does not have the right to vote on the FOMC this year, this does not affect his “flying eagles” all the time.
Kashkari pointed out that the Fed’s current task is to bring down inflation at a 40-year high, and it will not be deterred by financial market turmoil during the task, because the Fed does not “escort” investors.
Kashkari expects the Fed to raise rates by an additional 125 basis points from current rates at the remaining two meetings this year. He acknowledged that the transition to higher interest rates would take a toll on global growth.
He explained, “While U.S. commodity prices are up and down, underlying inflationary pressures — wages and services — tend to be stickier. We haven’t seen evidence that these things are moving in the right direction.”