Minneapolis Federal Reserve President Neel Kashkari said the Fed should continue to show the public and markets a policy reaction function that explains how it responds to various economic scenarios. In an interview with CNBC, he reiterated that small, gradual rate hikes are needed to curb inflation above 2 percent, and stressed the importance of markets understanding the Fed's response. While Fed Chair Kevin Warsh, who took office in May, is moving toward curbing communications, Kashkari argued for a 0.25 percentage point rate hike at the July FOMC meeting and voted against the decision to hold rates steady.
Kashkari advocates a 0.25% rate hike, which would raise the policy rate.
Hawkish rate hike stance likely pushes long-term yields up, lowering bond prices.
