Fed's Kashkari: Expects Fed to hold rates steady next year

<ul><li>Fed is not trying to create a recession</li><li>Economic data suggests Fed not as restrictive as it appears</li><li>We are allowing the data to drive Fed decisions</li><li>Fed has made a lot of progress on inflation</li><li>Data will tell the Fed if more hikes are needed</li><li>We want to see workers get better wages</li><li>Fed is watching strikes for economic impact</li></ul><p>Kashkari <a href="https://www.forexlive.com/centralbank/feds-kashkari-sees-a-40-chance-of-further-rate-hikes-perhaps-significantly-20230926/" target="_blank" rel="follow">laid out his position</a> yesterday and it was surprisingly hawkish, adding to the pain markets. I think there needs to be a fresh conversation about the distortions of QE and the stock of Fed holdings. There's a fair argument that's held down the long end and is what inverted the yield curve. In a 'normal' scenario, the higher stock of long-dated bonds in the market would have pushed up rates and restrained the economy more.</p>

This article was written by Adam Button at www.forexlive.com.