According to Nikkei News, Kashkari stated that the Federal Reserve may take a series of rate hikes in response to inflation triggered by the Middle East situation; in a written interview, he said that the next interest rate adjustment could either be a cut or a hike, depending on inflation trends and whether the Strait of Hormuz reopens quickly. If regional damage persists, global energy shortages will worsen, long-term inflation expectations could spiral out of control, and the FOMC may need to respond forcefully.

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2026-05-26 20:08:16

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GOLDEN FINANCE reported that on May 27, according to Nikkei News, Federal Reserve Kashkari said the Federal Reserve could take a “series” of rate hikes in response to inflation issues triggered by the situation in the Middle East. During the late-April FOMC meeting, the Federal Reserve kept interest rates unchanged. Kashkari and two other officials opposed the decision to include language in the Federal Reserve’s statement that hinted at a future shift toward monetary easing. In a written interview, Kashkari said: “I think the next rate adjustment could be a cut, or it could be a hike.” He used this to express his different view. Kashkari said that the outcome depends on the trend of inflation, which in turn depends on whether the Strait of Hormuz will reopen soon or remain effectively shut due to further damage to infrastructure in the region— the latter would worsen the global energy shortage. Kashkari said what is worrying is that long-term inflation expectations among businesses and households “may get out of control.” He said the FOMC “will very likely need to take strong countermeasures,” and that rate hikes, or even a series of rate hikes, may be necessary measures.

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Federal Reserve's Kashkari: The prolonged Iran conflict could trigger a "series" of interest rate hikes in the United States

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