Fed's Kashkari: Fed Must Focus on Inflation Risks, Too Early to Predict Next Move

BlockBeats News, May 27th – Minneapolis Fed President Kashkari said today that the Fed must focus on containing the mounting inflation risks, but it is currently "nowhere near" predicting the timing of the next rate adjustment. Kashkari also stated that the "inflation shockwave" from the Middle East conflict may persist, and this concern is gradually being reflected in the bond market. When discussing the impact of the Middle East conflict on the U.S. economy, Kashkari said that compared to the risk of labor market deterioration, the current inflation risk seems greater, but he also emphasized that the Fed "must pay attention to both at the same time."

Kashkari had previously supported the Fed's decision to keep rates unchanged in April, but he was also one of the officials opposed to maintaining the dovish forward guidance. He stated that the Fed should adopt a "neutral guidance," meaning that future rates will depend on subsequent data performance. He said: "Since that dissent – now several weeks ago – I think most of the data suggest that the inflation risk is rising, not falling." When asked if he still supports using neutral, rather than hawkish, language, he said: "Right now, yes, I think so." However, he also said: "I believe that it is nowhere near the time for me to predict the timing of the next move."