Federal Reserve Bank of Minneapolis President Neel Kashkari is speaking and has said that the Fed moved too slowly in 2021 to deal with high inflation.
He said wages are going up and there is a risk this could turn into a wage-driven inflation story. he said the Fed is focused on bringing down inflation.
He said worrying inflation is spreading and the Fed needs to act urgently. We are likely to raise rates and stay there as rate cuts in 2023 are a highly unlikely scenario.
He says a soft landing is possible, but he doesn’t know how likely it is.
key statements
- The Fed was too slow in 2021 to deal with high inflation.
- Inflation is dragging wages and not the other way around.
- Wages are going up; the risk of this going into a wage-driven inflation story.
- Worrying inflation is spreading; we have to act urgently.
- We are focused on reducing inflation.
- The Federal Reserve is highly unlikely to cut rates next year.
- Most likely, he will raise rates and stay there.
- I’m not sure what the markets are looking at.
- In the end there will be a balance between employment and inflation.
- The best data we have says that inflation expectations remain anchored.
- It will probably take several years for inflation to return to 2%.
- In a supply-constrained world, we still have to get inflation down to 2%.
US dollar remains in bullish territory
The US dollar has been toggling between bulls and bears on Wednesday, but held onto most of the previous day’s gains on concerns over US-China relations and hints from Federal Reserve officials. on aggressive rate hikes.
Source: Fx Street
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