Minneapolis Fed President warns persistent Middle East tensions could trigger a series of rate increases to curb inflation.
Minneapolis Fed President Neel Kashkari stated the Federal Reserve may need to implement a series of rate hikes if inflation risks escalate due to Middle East conflict. He noted the next policy move could be either a cut or a hike, depending on inflation trends.
Kashkari highlighted that a prolonged closure of the Strait of Hormuz could disrupt long-term inflation expectations, potentially leading to unanchored price pressures. This scenario would likely prompt tighter monetary policy, he said.
The comments were made during a visit to Tokyo for the Bank of Japan’s annual conference, where he discussed global economic risks and policy responses.