Fed official Kashkari said signs of broadening inflation led him to project one
rate hike in 2026 in the Fed’s economic projections released earlier this month,
with policy likely to be unchanged in 2027. In a Friday interview he said he is
concerned inflation is not solely linked to the Middle East; the Iran war has
pushed oil higher and price increases have broadened across categories. May PCE
rose 4.1% YoY, the biggest gain since April 2023, and prices have exceeded the
Fed’s 2% target for more than five years. The Fed’s dot plot released last week
showed roughly half of officials expect at least one rate hike this year.
