During the Yahoo Finance All Markets Summit at Union West in New York, Minneapolis Federal Reserve president Neel Kashkari discussed the possibility of interest-rate hikes. While most central bankers are favoring a policy pause as they wait for inflation to drop towards the 2% target, Kashkari mentioned that rate hikes are not completely off the table.
Investors are debating when interest rates might ease, but Kashkari believes that monetary policy is currently restrictive enough. He emphasized that no central banker can confidently rule out the possibility of more rate hikes. The decision will ultimately depend on how close inflation is to the Fed’s target.
Kashkari stated that he, like his colleagues, wants to maintain monetary policy unchanged while they gather more information about the direction of consumer prices. He stressed that there is no rush to cut rates, citing the strong US labor market as a reason to wait for clearer signals about inflation. Despite shifts in outlook throughout the year, markets are still anticipating inflation to decrease enough for rate cuts to come into play by 2024. However, the latest data suggests that investors are already pricing in an interest rate pivot by November. The uncertainty surrounding inflation and interest rates continues to keep investors on edge.
Kashkari believes that monetary policy is currently restrictive enough and that no central banker can confidently rule out the possibility of more rate hikes. Investors are debating when interest rates might ease, but Kashkari emphasizes that there is no rush to cut rates due to a strong US labor market and wait for clearer signals about inflation.
Despite shifts in outlook throughout the year, markets are still anticipating inflation to decrease enough for rate cuts to come into play by 2024. However, recent data suggests that investors may already be pricing in an interest rate pivot by November.
Kashkari’s statement at Yahoo Finance All Markets Summit has caused uncertainty among investors regarding whether or not we will see more interest-rate hikes from central banks in near future or not?
