Fed's Kashkari: Middle East inflation risks could warrant series of rate hikes

 Minneapolis Fed President Neel Kashkari said that the central bank could begin “a series of” rate increases as inflation rises, sparked by the Middle East conflict, in comments to Nikkei as he visits Tokyo for two days to attend the Bank of Japan's annual conference.

He said that “the next rate change could be either a cut or a hike,” adding that it would depend on inflation’s behaviour. Kashkari added that a persistent closure of the Strait of Hormuz can affect long-term inflation expectations in households and businesses, which “could become unanchored.”

Consequently, the central bank would likely tighten policy. “Federal funds rate increases, potentially a series of them, could be warranted,” Kashkari said