Kashkari Says Inflation "Still Too High," More Hikes Possible as Dollar Hits 3-Month High

Why it matters

These are the first public comments from a voting FOMC official since the Federal Reserve's September 15–16 meeting raised rates 25 basis points to 3.75%–4% — the first hike in three years. Markets are now pricing the possibility that the tightening cycle is not over.

Minneapolis Fed President Neel Kashkari said at a Council on Foreign Relations event in New York on September 30 that inflation remains "still too high" and has run above target for five consecutive years, adding that the latest data has "not changed" his assessment, Reuters reported October 1. He did not rule out further rate hikes.

New York Fed President John Williams said a day earlier that one more hike before year-end was possible, though the central bank was "in no hurry" to act.

August core PCE inflation came in at 3.0% year over year — below expectations but still well above the Fed's 2% target.

On October 1, the U.S. dollar index rose to 101.777, a three-month high, while the euro fell to a 16-month low of $1.1297, according to Dow Jones Newswires. No market forecast is offered here; these are reported figures only.

Sources: Reuters (New York, Oct 1); Dow Jones Newswires via Morningstar (Oct 1).