Fed's Kashkari Warns Prolonged Iran Conflict May Trigger Series of Rate Hikes on May 27

GateNews
According to Nikkei, Federal Reserve official Neel Kashkari warned on May 27 that a prolonged conflict in Iran could prompt the Fed to implement a "series" of rate hikes to combat resulting inflation. Kashkari stated the next rate adjustment could be either a hike or cut, depending on inflation trends and whether the Strait of Hormuz reopens quickly or remains disrupted due to infrastructure damage, the latter potentially worsening global energy shortages. Kashkari expressed concern that long-term inflation expectations among businesses and households "could spiral out of control," noting the FOMC "will likely need to take strong action," with multiple rate increases possibly becoming necessary.
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