Fed’s Kashkari keeps October open, still sees more hikes ahead

Minneapolis Fed President Neel Kashkari said he is unsure about an October rate hike but added that he is “open-minded about how fast the Fed should raise interest rates.”

Kashkari reiterated that “his September rate projections were for one more hike this year, another in 2027,” indicating that he sees the Fed funds rate near 4.25%-4.50%, and reiterating his hawkish posture.

Key highlights:

'I don't have a strong view' about October rate hike

Says he is open-minded about how fast fed should raise interest rates

Says his September rate projections were for one more hike this year, another in 2027

No sense monetary policy providing much restraint at current moment

Says he doesn't see meaningful tightening in financial conditions given data

Economy has outperformed expectations since fed's September policy meeting

Says he has some confidence inflation will fade, but shocks keep happening

Fed's September rate hike showed central bank will act to lower inflation

Markets now see that fed chairman warsh will act to cool inflation

Depending on economy's performance, fed may have to hike more than expected

Supply shocks should fade, rate hikes are aimed at tempering price expectations

Market inflation expectations still centered on 2%

Says he does not see signs of systemic risk in financial system

Even with yield rise, treasury market has been functioning

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.94%	0.61%	0.44%	0.08%	0.46%	0.68%	-0.38%
EUR	-0.94%		-0.33%	-0.51%	-0.89%	-0.47%	-0.26%	-1.31%
GBP	-0.61%	0.33%		-0.19%	-0.50%	-0.16%	0.07%	-0.98%
JPY	-0.44%	0.51%	0.19%		-0.36%	0.03%	0.24%	-0.81%
CAD	-0.08%	0.89%	0.50%	0.36%		0.39%	0.60%	-0.45%
AUD	-0.46%	0.47%	0.16%	-0.03%	-0.39%		0.24%	-0.80%
NZD	-0.68%	0.26%	-0.07%	-0.24%	-0.60%	-0.24%		-1.03%
CHF	0.38%	1.31%	0.98%	0.81%	0.45%	0.80%	1.03%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Fed FAQs

What does the Federal Reserve do, how does it impact the US Dollar?

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.

How often does the Fed hold monetary policy meetings?

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.

What is Quantitative Easing (QE) and how does it impact USD?

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.

What is Quantitative Tightening (QT) and how does it impact 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.

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