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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2026-05-27 01:53:11

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Golden Finance reports that on May 27th, according to Nikkei News, Federal Reserve Kashkari stated that the Federal Reserve may take a "series" of interest rate hikes in response to inflation issues triggered 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 reopens soon or remains effectively closed due to further damage to regional infrastructure, the latter exacerbating global energy shortages. Kashkari expressed concern that long-term inflation expectations among businesses and households "could get out of control." He said the FOMC "is very likely to need to take strong countermeasures," and that rate hikes, or even a series of hikes, may be necessary measures.

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Federal Reserve's Kashkari: The prolonged Iran conflict could trigger a rate hike

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