Fed's Kashkari: Could support another 75 bps rate hike in July

Minneapolis Fed President Niel Kashkari said on Friday that he could support another 75 basis points rate hike in July, as reported by Reuters.

Additional takeaways

"Need to be cautious about too much front-loading on rate hikes."

"Prudent strategy might be to continue with 50 bps rate hikes after July meeting."

"Fed would still need to be data-dependent."

"If supply shocks subside, may not need to raise rates as high as otherwise."

"I assume we will be able to relax policy somewhat in 2024."

"If inflation drifts higher, or supply side does not improve, might need to continue raising rates beyond what currently is forecasted."

"A steady approach to raising rates may help us avoid tightening more than necessary."

"I do not think a comparison with the 1970s and 1980s is relevant, because the Fed then had to establish its credibility."

Market reaction

The dollar recovery continues after these comments with the US Dollar Index rising nearly 1% on the day at 104.82.