Fed's Kashkari (2026 Voter) says it is too soon to assess Iran conflict impact on inflation, it could have an impact on monetary policy

• Policy is in a good place.
• Uncertainty around tariffs has increased.
• Does not think latest round of tariffs will have a fresh inflation impact.
• Near term AI investment probably pushing up neutral rate.
• Expects housing inflation pressures to moderate.
• Inflation was headline in the right direction until the Iran war arrived.
• March SEPs will have more uncertainty.
• Expects Warsh to do well as Fed Chair.
• Current policy tool kit is complicated and worth debating.
• Powell has done a great job. Would love it if he stayed on as governor.

Kashkari's comments suggest a cautious stance regarding the impact of geopolitical events, like the Iran conflict, on inflation and monetary policy. While he notes current policies are well-positioned, the uncertainty he cites regarding tariffs and inflation may indicate a more complex outlook for future rate decisions. This could lead traders to re-evaluate expectations for Fed actions, especially ahead of the March SEPs update.