Kashkari
The market is pricing in three hikes now, with the third in December.
- I believe it is more likely we end up back in the low-inflation regime that we were in for 20 years than a new high-inflation regime
- The costs of ending up in the high-inflation regime are likely larger than the costs of ending up back in the low-inflation regime
- I see remarkable economic and policy uncertainty
Previously, he had forecast no hikes until 2024. That's an abrupt shift but it's typical of everyone at the Fed.
"While my baseline forecast remains that the high inflation consumers and businesses are currently experiencing will likely be transitory, I am putting more weight on the possibility that such transitory high inflation could nonetheless lead to an increase in long-term inflation expectations above our 2 percent target."
