Minneapolis Fed President Kashkari emphasized again the necessity of caution amid the uncertainty of trade conflicts and pointed out that defending inflation expectations is 'crucial.'
On Tuesday, at an event hosted by the Bank of Japan in Tokyo, he stated that there is a 'beneficial debate' among policymakers—whether to view the inflation impact of tariffs imposed by U.S. President Trump as a temporary shock or as a long-term condition.
In prepared remarks, Kashkari pointed out that tariff negotiations could take months or years to fully resolve, that taxing intermediate products takes time to transmit, and that the risk of inflation expectations becoming unanchored may increase over time.
He stated: "These arguments support the stance of maintaining the policy rate, as the current rate may only be moderately restrictive until the path of tariffs and their impact on prices becomes clearer." He also added: "Given that I will prioritize defending long-term inflation expectations, I find these arguments more persuasive."
It is worth noting that Kashkari is not a voting member of the Federal Open Market Committee (FOMC) this year.
The announcement of tariffs and ongoing trade negotiations have led to a surge in uncertainty for American consumers and businesses, causing them to pause large spending and investment decisions while waiting for policy clarity. This stagnation in activity makes it difficult for policymakers to understand how tariffs and other changes will ultimately affect the economy.
Kashkari has stated that in this environment, the Fed is in a 'wait-and-see' mode until more information is available. On Monday, in an interview with Bloomberg Television, he expressed uncertainty about whether Fed officials will see a sufficiently clear situation at the policy meeting in September this year.
Fed officials have kept interest rates unchanged at three meetings so far this year and are expected to do so at the next meeting in June. Prior to this, the Fed cut rates by one percentage point over the last three months of last year.
Economists generally expect tariffs to lead to inflation, but the extent of this depends on the scale of the tariffs and the degree of retaliation from other countries. Economists have also indicated that tariffs could weigh on economic growth and lead to layoffs, potentially resulting in so-called 'stagflation,' placing the Fed in a dilemma: whether to maintain high interest rates to curb inflation or cut rates to support a struggling economy.
Kashkari stated last month that ensuring tariffs do not trigger persistent inflation is the Federal Reserve's responsibility, which aligns with the views of some of his colleagues. They believe that the high inflation of recent years means the Fed may need to prioritize lowering prices rather than boosting the labor market to prevent a larger, more entrenched inflation spiral.
The key to preventing this situation is to keep consumer expectations for long-term prices near the Fed's 2% inflation target. Policymakers have been closely monitoring metrics in this regard. While a survey shows that expectations for price increases over the next five to ten years have reached the highest level since 1991, other metrics still indicate they are close to the Fed's 2% target.
"In the U.S., inflation has also consistently exceeded our 2% target for four years," Kashkari reminded the audience at a Bank of Japan event, "How many years of high inflation will occur before long-term inflation expectations become unanchored?"#巨鲸JamesWynn动态 #比特币2025大会 $BTC 
