Kashkari’s remarks are harsh enough—if anything happens with the Hormuz, even interest-rate hikes and back-to-back moves could be on the table, and the market will need to reprice geopolitical risk.

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.