Minneapolis Fed President Kashkari said he expects the Fed will need further
rate hikes to rein in the economy and inflation but does not have a strong view
on acting at the October meeting. He had previously forecast another 25bp this
year and an additional hike in 2027; since the September meeting US activity has
been stronger than he expected and inflation remains too high. If the economy
stays unusually strong and inflation proves more persistent, rates could need to
rise above current expectations. Kashkari said the labor market is healthy and
the economy's strength suggests policy may not be "particularly restrictive." He
added recent market volatility has not created systemic risk and the US Treasury
market can absorb a re-pricing of rates.
