Fed/ Kashkari: Rate hike may be on the agenda

Minneapolis Fed President Neel Kashkari said he expects the central bank to keep a tight hold on interest rates for an extended period of time, and there’s a possibility of raising rates if inflation indicators don’t ease. Minneapolis Fed President Neel Kashkari said Tuesday that he believes interest rates should probably be held at current levels for an extended period of time, and he didn’t rule out raising rates if inflation stays near 3%. “The most likely scenario is where we are right now, which is that we’re going to be inactive for a long time until we get clarity on whether inflation is really continuing or whether it’s really stalled? I don’t think we know the answer to that,” Kashkari said at a conference in Los Angeles. Kashkari said interest rates could be cut if inflation starts to move toward the Fed’s 2% target, but he said that’s not the most likely scenario. The Fed plans two rate cuts at its March meeting and will reassess when the Federal Open Market Committee updates its “dot plot” in June, Kashkari said. “The bar is pretty high for us, but it’s not infinite,” said Kashkari, who is not an FOMC voter this year and won’t be until 2026.