Minneapolis Fed President Neil Kashkari spoke about the Fed’s current stance and outlook on inflation.
Kashkari said that the Fed’s abandonment of the 2% inflation target would harm the central bank’s credibility for the markets.
Kashkari emphasized that inflation is now declining with a slowdown in the housing market, falling commodity prices, and declining new rents.
Kashkari added that the Fed is ready to keep interest rates high for as long as possible to bring down inflation towards its target.
markets now
Markets await the report of the personal consumption expenditures index, the Fed’s preferred measure of inflation, while the spot gold price marginally rises to $1,981 an ounce, while futures transactions record $1,999 an ounce.
The European inflation data, which indicated a strong decline in the annual inflation rate, weakened the euro because the European Central Bank may not raise interest rates as strongly as previously expected.
While the dollar index was affected by the decline of the euro (the heaviest weight among the components of the index), the index now records 102.110, after falling to levels of 101 last night.