Speaking to CNBC, Kashkari stated that in June, decisions can be made on interest rates in both directions.
Fed official; “In my opinion, there may be a rate hike at the next meeting or we can wait. Not raising rates in June does not indicate the end of the tightening cycle, it means we need to get more information. There may also be a possibility of a rate hike in July.” made its assessment.
Fed officials increased interest rates aggressively in the past 14 months, raising the policy rate from 0 percent to 5-5.25 percent. The US Federal Reserve, which slowed the rate of increase in interest rates this year, increased interest rates by 25 basis points three times. Some officials gave messages that the interest rate hike could be suspended at the 13 – 14 June meeting.
The crisis in the sector with the bankruptcy of some banks in the USA caused a tightening in loans. Policy makers stated that they closely follow the developments in the sector. Kashkari stated that the stress of groceries, which led to tightening in credit conditions, may support the reduction of price pressures, but that he has not seen any signs of this yet.
Kashkari commented, “From the point of view of inflation dynamics, we are in the most uncertain times in the 7-8 year period I have been on the Fed Committee. Therefore, my guide will be inflation.”
Kashkari continued his words, “We may need to go above 6 percent in interest rates, we will see what is happening in the services sector. But if banking stress leads to a decrease in inflation, then we may be close to the peak in interest rates. We do not know for sure yet.”
Bullard: 2 more rate hikes needed
Speaking in Florida today, St. Louis Fed President James Bullard argued that two more rate hikes should be made this year to combat inflation.
Bullard, one of the Fed’s most hawkish figures, has no voting rights in the FOMC this year.