Fed's Kashkari Open to October Rate Hike But Holds No Strong View, Sees More Tightening Ahead

Minneapolis Federal Reserve President Neel Kashkari said on October 1 that he expects additional interest rate hikes will be necessary but stopped short of committing to a move at the Fed's October meeting, saying he has "no strong view" on whether action is needed this month.

Kashkari's September projections called for one more rate hike in 2026 and another in 2027, but he cautioned that the Fed may need to tighten more aggressively than that if the economy continues to outperform. He noted that monetary policy is not currently providing much restraint and that the economy has exceeded expectations since the September meeting, factors that could push the Fed toward a more aggressive path.

Kashkari offered a partial reassurance on inflation, saying that market inflation expectations remain anchored near the Fed's 2% target. He described himself as open-minded on the pace of tightening, leaving the door open for an October move while declining to advocate for one.