Fed’s Kashkari: Risk to US inflation now higher than risk of deterioration in labour market

Minneapolis Federal Reserve (Fed) Bank President Neel Kashkari said in the European trading session on Wednesday that the major concern for the central bank now is higher United States (US) inflation than deteriorating labor market conditions; however, the central bank needs to pay attention to both.

Additional remarks

Fed should have neutral policy outlook going forward.

Most of the US data released since my dissent in April has shown inflationary risks are higher, not lower.

Far too soon to make prediction on when next Fed move could be, when asked about market bets of October rate hike.

Inflationary shockwave sent across globe from Middle East war could persist.

Concern over global inflation working its way into bond market.

 Market reaction

A marginal selling pressure was seen in the US Dollar (USD) after Fed Kashkari's comments. As of writing, the US Dollar Index (DXY) trades 0.1% lower to near 99.05.

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