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: 2025.05.27
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Fed's Kashkari: Support stance of maintaining policy rate until more clarity on tariffs
World FX news
Breaking news
Fed's Kashkari: Support stance of maintaining policy rate until more clarity on tariffs
New
2025.05.27 17:09
2025.05.27 17:09
2025.05.27 17:09
Minneapolis Federal Reserve (Fed) President Neel Kashkari said on Tuesday that he supports the stance to maintain interest rates until there is some clarity on the impact of higher tariffs on inflation.
Key quotes
There is a 'healthy debate' among the Fed policymakers on whether to 'look through' inflationary effects of new tariffs.
Personally, I find arguments against looking through tariff-induced inflation more compelling.
These arguments support stance of maintaining fed's policy rate until there is more clarity on path for tariffs, their impact on prices and economic activity.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials - the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed's weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Last updated
: 2025.05.27
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USD/JPY steadies ahead of US JOLTS data and potential clues on the health of the US labour market
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2025.06.03 22:43Indian Rupee slips as US Dollar stabilizes, RBI rate cut bets in focus
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2025.06.03 22:40Gold eases from almost one-month high ahead of US JOLTS data, more Fed speak
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2025.06.03 20:50USD/CHF returns above 0.8200 with the Dollar appreciating as risk aversion eases
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2025.06.03 20:42AUD/USD drifts lower amid cautious RBA, global trade uncertainty
The Australian Dollar (AUD) slips against the US Dollar (USD) on Tuesday, retreating from recent highs to 0.6460 as traders react to the Reserve Bank of Australia's (RBA) cautious tone and softer-than-expected current account figures.
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2025.06.03 20:42JPY is a relative performer on the day - Scotiabank
Japanese Yen (JPY) is soft, down marginally against the US Dollar (USD) but outperforming most of the G10 currencies, Scotiabank's Chief FX Strategist Shaun Osborne notes.
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2025.06.03 20:38GBP soft vs. USD but performing relatively well vs. G10 - Scotiabank
Pound Sterling (GBP) is soft, down a marginal 0.2% against the US Dollar (USD) and a relative performer among the G10 in an environment of mild, albeit broad-based USD strength, Scotiabank's Chief FX Strategist Shaun Osborne notes.
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2025.06.03 20:34EUR hits fresh one month high ahead of ECB Thursday - Scotiabank
Euro (EUR) is soft, down 0.3% against the US Dollar (USD) and a mid-performer among the G10 currencies, pulling back modestly from its overnight push to a fresh one month high, Scotiabank's Chief FX Strategist Shaun Osborne notes.
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2025.06.03 20:30CAD edges lower after another rebound from the upper 1.36s - Scotiabank
The Canadian Dollar (CAD) has edged a little lower on the session, in line with its major currency peers. Spot may continue to range trade ahead of Wednesday's BoC policy decision, Scotiabank's Chief FX Strategist Shaun Osborne notes.
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2025.06.03 20:30USD steadies, undertone remains bearish - Scotiabank
The US Dollar (USD) is tracking a little higher overall, consolidating the soft tone seen over the past few sessions as the Dollar Index (DXY) losses hold near recent lows, Scotiabank's Chief FX Strategist Shaun Osborne notes.
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2025.06.03 20:22Disclaimer:
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