Fed's Kashkari expects more rate hikes, unsure on need to act this month
TLT•Minneapolis Fed President Neel Kashkari expects additional rate increases will be needed through 2027 but is unsure whether the next hike should come at the October 27-28 meeting. His projections call for one more quarter-point hike this year and another in 2027.
1. Rate outlook
Kashkari said he is open-minded about the timing of the Fed’s next rate increase and has no strong view on whether it should happen at the October 27-28 meeting. His projections call for one more quarter-percentage-point increase this year and another in 2027.
2. Inflation and markets
Kashkari said recent data suggest the economy is doing better than he anticipated, while inflation remains too elevated. He said policy may need to go higher than he currently expects if the economy remains resilient and inflation proves stickier, but added that he does not know whether that will happen.
3. Market conditions
Kashkari said markets are functioning properly despite volatility and that he sees no evidence of systemic risk. He said the banking sector bears watching as borrowing costs shift, while the Treasury market has been able to process repricing.
