Federal Reserve's Kashkari stated that if inflation driven by the Middle East situation persists, a series of rate hikes may be implemented, and he opposes hinting at future easing in the statement; in a written interview, he said the next rate move could be either a cut or a hike, depending on inflation trends and whether the Strait of Hormuz reopens quickly. If long-term inflation expectations become unanchored, the FOMC is likely to need to respond forcefully, possibly with consecutive rate hikes.

MeNews

2026-05-26 20:33:30

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ME News Report, May 27 (UTC+8), Jin10 Data, Federal Reserve's Kashkari stated that the Federal Reserve may implement a "series" of rate hikes in response to inflation caused by the Middle East situation. 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 statement hinting at future monetary easing policies. Kashkari said in a written interview, "I believe the next rate adjustment could be a cut or a hike." He used this to express his differing view. Kashkari stated that the outcome depends on the inflation trend, which in turn depends on whether the Strait of Hormuz will reopen soon or remain effectively closed due to further damage to regional infrastructure, the latter of which would exacerbate global energy shortages. Kashkari expressed concern that long-term inflation expectations among businesses and households "could spiral out of control." He said the FOMC "is very likely to need strong measures," and that rate hikes, possibly a series of hikes, may be necessary. (Source: Jin10)

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QuietRabbitInTheWoods

· 9h ago

Kashkari's words sound like he's treating the Strait of Hormuz as a remote control, with the inflation switch over there?

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GateUser-e1cfc287

· 9h ago

Whenever the Middle East is bombed, the Federal Reserve becomes tense; the old script of the petrodollar is still playing out.

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GateUser-0fdb3438

· 10h ago

Next meeting, I need to keep an eye on oil tanker insurance premiums and news from the Persian Gulf—more exciting than CPI.

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On-ChainSoilAfterTheRain

· 10h ago

A two-way gate for both interest rate hikes and cuts is here—once again, the market will be guessing, and traders won’t be able to sleep tonight.

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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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