Minneapolis Federal Reserve Bank President Neel Kashkari is speaking at an Eau Claire Area Chamber of Commerce event and has said he believes the forces that are currently keeping people out of the labour market and pushing up prices will prove to be temporary.

He said the pressures will fade as COVID-19 turns from being pandemic to being endemic.

"We are getting mixed signals out of the economy," Kashkari said

"I'm optimistic, in the next three, six, nine months we will get a lot more information," and clarity about the outlook for both inflation and the labour market, he said.

Key comments

The next 3, 6, 9 months will be very important in getting more clarity on the economic outlook.

Right now there's a lot of uncertainty.

Whether it's a demand shock or a supply shock, either way, the story should be temporary.

Should reach equilibrium in the next few quarters.

The future outlook for inflation depends in part on what will happen with the labour supply.

Fed's Kashkari says he is ‘keeping an open mind’ on the monetary policy stance and has said that once the taper ends, the Fed would consider appropriate timing for rate hikes.

Market implications

Forex markets are waiting for the US Consumer Price Index and hence the US dollar is consolidating, rather than reacting to each comment from central bankers on Tuesday. 

The US dollar has been moving in a tight range between 93.90 and 94.10 since data earlier the day showed that US Producer Prices had increased solidly in October.

Traders noted that while high inflation could persist for a while amid tight supply chains related to the pandemic,  tomorrow's key event in CPI will be more key in this regard.

US dollar hourly chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD recovers above 1.0400, looks to post weekly gains

EUR/USD recovers above 1.0400, looks to post weekly gains

EUR/USD regained its traction after dropping toward 1.0350 in the early American session and climbed above 1.0400. Trading conditions remain thin on Black Friday and the pair remains on track to end the week in positive territory.

EUR/USD News

GBP/USD recovers toward 1.2100 as US Dollar loses strength

GBP/USD recovers toward 1.2100 as US Dollar loses strength

GBP/USD managed to stage a recovery toward 1.2100 in the American session on Friday and now looks to register gains for the third straight week. The US Dollar struggles to preserve its strength as markets remain subdued on Black Friday. 

GBPUSD News

Gold steadies near $1,750 as US yields retreat

Gold steadies near $1,750 as US yields retreat

Gold price continues to move sideways at around $1,750 heading into the weekend. The benchmark 10-year US Treasury bond yield retreated from the daily high it touched above 3.75% earlier in the day, allowing XAU/USD to erase a portion of its daily losses.

Gold News

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin price is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read more

FX next week and yield curve inversions

FX next week and yield curve inversions

Since the Fed's last raise November 3, Fed Funds rate opens and closes at 3.83. The Fed Funds rate once traded freely on its own with highs and lows as any financial instrument. In 2000, Central banks implemented meetings every 6 weeks.

Read more

Forex MAJORS

Cryptocurrencies

Signatures