Investor bets the Fed will turn to interest-rate cuts next year seem very unlikely to pan out because the focus has to remain on inflation rather than worries about a recession, Minneapolis President Neel Kashkari said Wednesday.
“The more likely scenario is we would continue raising and then we would sit there, until we have a lot of confidence that inflation is well on its way back down to 2% before we would start to cut,” he said during a talk at Columbia University. It could take several years for inflation to come back down, he said.
The Fed probably hiked too slowly he said, though the global nature of the price jump means going sooner may not have completely succeeded. “It’s concerning that it’s spreading across the economy and it just means that we have do have to continue to act with urgency,” he said. “We are laser focused on getting inflation down. Whether we are technically in a recession right now or not doesn’t change my analysis.” (See: MNI: Recession Could Force Fed To End QT Early - Ex Officials)