Reuters- Minneapolis Federal Reserve BankFederal Reserve Bank President Neel Kashkari said on Thursday that the central bank has more work to bring down inflation and is quite a ways away from being able to pause its aggressive interest-rate hikes.
Kashkari said at the Bremer Financial Corporation Fall Leadership Conference that he is not comfortable saying we are going to pause until there is evidence that inflation is cooling. He said there was no evidence that inflation had peaked.
The Fed is expected to do so again soon next month when it meets early next month, because it has delivered a string of supersized three-quarters of a percentage point interest rate increases to bring down decades-high inflation. The Fed believes that short-term borrowing costs, currently at 3% -- 3.25%, will rise to 4.6% by early next year.
The steeper than expected U.S. rate-hike trajectory has sparked declines in major currencies against the dollar and added to the turmoil in global equity markets already roiled by Russia's invasion of Ukraine and other risks.
In many cases, central banks have intervened in their financial markets to address disclocation due to the tightening of interest rates due to the stronger dollar, which has made inflation worse in many cases.
Kashkari believes there may be some cracks in the financial markets as investors adjust to the higher rate environment, as the benchmark equity indexes on Thursday dropped further, with U.S. stocks volatile.
He said that the bar for the Fed to shift its policy stance to rescue markets here is very high.