US Fed's Kashari expects another rate hike and longer hold

The news: One of the US Federal Reserve's 12 regional presidents expects one more rate hike from the central bank, and for rates to be held for longer to tackle inflation. Minneapolis Federal Reserve Bank President Neel Kashkari said the US economy had been more resilient than the Fed's board had realised.

The numbers: At last week's FOMC meeting the Fed held interest rates steady in a range of 5.25%-5.50%, but indicated it might not be finished hiking. The annual inflation rate for the year ending August 2023 was 3.7%, down from a 9.1% peak in mid-2022. The Federal Reserve has an annual inflation target of 2%.

The context: The Fed has had some success with its rate hiking cycle since it began in March 2022, but a recent rally in oil prices to 10-month highs and extended supply cutbacks by Russia and Saudi Arabia have restoked inflation concerns around the world.

What they said: "If the economy is fundamentally much stronger than we realized, on the margin, that would tell me rates probably have to go a little bit higher, and then be held higher for longer to cool things off," Kashkari said in a speech at University of Pennsylvania's Wharton School of Business on Monday.