Fed's Kashkari: If inflation persists, it will take longer to reach the level needed to lower interest rates

On April 11, the Federal Reserve Kashkari said in a speech: We have not yet seen evidence of rising long-term inflation expectations. Investors may believe that if the trade deficit decreases, the investment attractiveness of the United States will weaken. The claim of a shift in investor preferences may be credible. A weaker dollar indicates that investor preferences are shifting. I think we are still a long way from the market conditions we saw during the COVID-19 pandemic. Finally, we have the ability to manage some of these transitional processes and can smooth out some of the imbalances. We cannot be sure where yields will eventually stabilize, but can only smooth this change. The CPI data shows many positive signals. The impact of tariffs indicates that inflation will rise again. Tariffs have pushed up inflation and reduced economic activity. The economic outlook largely depends on how and how quickly the tariff talks progress. If inflation drags on, it may take longer to reach the comfortable level needed to lower interest rates. I think intervention by the Federal Reserve or the Treasury should be done only as a last resort, and caution should be exercised on measures that might signal a weakening of the Fed's commitment to reducing inflation. The Fed has the tools to provide more liquidity. (Kim X)