FED: Kashkari Suggests High CPI Required For December Rate Hold

On the eve of the CPI release for October - one of two such reports before the December FOMC - Minneapolis Fed President Kashkari suggests that it could take significant upside inflation surprises in the next two months to cause the Fed to deviate from cutting rates a third consecutive time at the next meeting: 

• “If we saw inflation surprises to the upside between now and then, that might give us pause...It’d be hard to imagine the labor market really heats up between now and December. There’s just not that much time...There’d have to be a surprise on the inflation front to change the outlook so dramatically.”
• He notes that current Fed policy is "modestly restrictive," and "In my judgment we are still at a modestly contractionary stance, but ultimately the economy will guide us, in terms of how far we are needing to go" to get to neutral territory.
• Taken with the context that the most recent FOMC Dot Plot implied 25bp cuts in both Nov (deliveredf) and Dec, Kashkari's comments suggest that the default position for the FOMC is a 25bp cut in December (currently a little over 60% priced, vs 40% for a "skip"), though that could be put into further question by a hot inflation print Wednesday.
• Kashkari said last month that "right now I am forecasting some more modest cuts over the next several quarters to get to something around neutral, but it’s going to depend on the data… [faster cuts would require] real evidence that the labor market is weakening quickly.”