Minneapolis Fed Pres. Kashkari is speaking. He says:

  • we indicated we will get rates at to at least the neutral by the end of the year
  • the question I'm asking myself is, do we just have to follow through on what have promised, or will need to do more
  • supply is being held back because of Covid, worker shortages
  • Russia's war, and China's Covid lockdowns are affecting supply chains here
  • we will do what we need to do to bring economy back into balance
  • don't know how much we will need to do
  • if we get help from supply-side, won't have to do with as much
  • if we don't get help from supply-side will need to do more
  • right now, it's easy to be a hawk because inflation is out of whack, and labor market is strong
  • you want to avoid over correcting, but economics is imperfect
  • maybe it's a better crypto is imploding now than 5 years from now when more people's money would have been at risk
  • If inflation goes on for long enough it starts to change behavior and expectations
  • We need to get inflation back down to 2% before wage – price spiral takes off
  • Has a lot a confidence that raising rates will affect demand. Fed does not have tools to affect the supply side of the economy

The economic balls are in the air, and uncertainty prevails according to Kashkari. However, consistent with other Fed officials, the road for Fed policy is to the upside toward the neutral rate, which most officials still have at 2.5%.

The current target rate is 1.0%. If the Fed raises 2 times by 50 basis points over the next 2 meetings, that would bring the rate to 2.0% with 3 meetings left in 2022 after that.

The US stock market hold onto solid gains: