War Creates Uncertainty for Rate Path Says Fed's Kashkari (Full Panel)

• Geopolitical events, especially the attacks on Iran, introduce significant uncertainty to the inflation and interest rate outlook, making Kashkari less confident about a single rate cut this year.
• Kashkari acknowledges the Fed's previous 'transitory' inflation view was incorrect regarding the pandemic and Russia-Ukraine war, but notes the Hamas-Israel conflict did not trigger a commodity shock.
• He emphasizes the need for more data to assess the duration and severity of the current geopolitical impact on inflation and monetary policy.
• Kashkari suggests the US economy's resilience in the face of aggressive rate hikes indicates a potentially higher neutral interest rate.

Federal Reserve Bank of Minneapolis President Neel Kashkari expresses increased uncertainty regarding the path of interest rates due to recent geopolitical events, particularly the attacks on Iran. He notes that while inflation was previously trending in the right direction, new shocks necessitate more data before making definitive policy decisions. He reiterates the Fed's commitment to bringing inflation down to 2% while maintaining a strong labor market.