Fed's Kashkari (2026 voter) to the NYT says the Trump admin actions against the Fed are "really about monetary policy"

• “The escalation over the course of the past year is really about monetary policy”, “I thought the chairman explained that accurately.”

• Does not see any impetus in rate cut in January.
• Sees economy showing resilience.
• With rates between 3.5-3.75%, said that puts the Fed in a “pretty good spot right now.”
• Could still be some scope to cut later in the year, but right now, it is “just way too soon.”
• Wary about cutting rates because of elevated inflation and his expectation that Trump’s tariffs would continue to push up prices over time.

• It’s entirely plausible that we are sitting here well above our target for two to three more years, and then looking at seven or eight years of elevated inflation. That’s very concerning.

Kashkari's comments highlight the Fed's current stance on monetary policy, indicating they see stability in rates without cuts in the immediate term. His remarks suggest that while future cuts might remain a possibility, significant concerns about inflation and the impact of tariffs mean the focus is on cautious management rather than aggressive easing. This could influence market expectations around the Fed's future actions and overall risk sentiment in both equities and fixed income.