Free Trial

MNI BRIEF: Kashkari Says Fed Needs Sustained Tighter Policy

(MNI) OTTAWA
(MNI)

The Federal Reserve needs to keep hiking interest rates and then make sure to hold them at restrictive levels for a while to make sure inflation is clearly coming back to target, Minneapolis President Neel Kashkari said Tuesday in comments that line up closely with other FOMC members.

There is a danger of relaxing policy early in response to limited signs of a slowing economy and prices, Kashkari said at a Wall Street Journal online talk. He didn't lay out a specific view of the pace of hikes over the next few meetings. “We need to get policy to a stance where we’re clearly tightening the economy, and then we need to be patient and allow inflation to come back down towards our 2% target,” he said. Inflation still appears to be sticky and “we have more work to do,” Kashkari said.

St. Louis President James Bullard earlier today said the key rate needs to move to around 4.5%, and he told MNI’s FedSpeak podcast last month rates might need to be “higher for longer,” pushing back against market expectations for rate cuts next year.

MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.