Australian exchange rate today's news, good for the dollar! Senior Federal Reserve officials see a 40% chance of a sharp increase in interest rates, close to 50%.

SEPTEMBER 27 - Minneapolis Federal Reserve President Kashkari sees a near 50 percent chance that interest rates will need to rise sharply to keep inflation down. In an article published Tuesday, the central banker said the United States could move toward a "high-pressure equilibrium" in which inflation remains high and interest rates need to be "possibly meaningfully higher."

Minneapolis Federal Reserve President Kashkari believes that,The probability that interest rates will need to rise sharply to contain inflation is close to 50%.。

In an article published on Tuesday, the central banker said there were good reasons for the US economy to move towards a "high-pressure equilibrium", which would include sustained growth characterised by strong consumer spending and a "spinning economic flywheel".In this context, inflation has declined, but remains above the Federal Reserve's 2% target, posing a challenge for policymakers.

"The case for this is that most of the disinflationary gains we have observed so far have been due to supply-side factors, such as workers re-entering the labour market and supply chain analysis, rather than monetary policy suppressing demand," he wrote in an article entitled "Is it enough for policy to tighten sharply?"

Noting that interest rate-sensitive areas such as housing and cars remained strong despite the Fed's tightening, he said: "These dynamics raise the question of how tight is policy right now? If policy were really tight, would we still see such strong economic activity?"

Inflation in the services sector (excluding housing rental costs) has been falling, but remains high in other respects, raising long-term concerns.

Mr. Kashkari said: "Once supply factors are fully restored, will austerity be enough to do the job of bringing services inflation back to target? Probably not.In that case, we would have to push up the federal funds rate, which could be meaningfully higher"Today, IThere is a 40% chance of this happening。”

That still means, of course, that he sees a 60 per cent chance of the Fed achieving its goal of a "soft landing" in which inflation returns to target without a harmful recession. He sees "the real progress we have made in fighting inflation and the real performance of the labour market" as factors that push policymakers to achieve their goals.

However, on the same day he made the above remarks,JPMorgan CEO Jamie Dimon believes the Fed may have to raise its base rate to 7%.The current target range for the federal funds rate is between 5.25% and 5.5%

Other Federal Reserve officials have recently said that theyInterest rates are expected to remain high for at least an extended period of time。

In the case of Kashkari, he has long been considered one of the more moderate members of the rate-setting FOMC, which means he tends to lower interest rates and ease monetary policy.

ButIn recent months, he has taken a tougher stance, because he is concerned about the dynamics of keeping inflation above target. He is a voting member of the FOMC this year. The FOMC decided last week to keep interest rates unchanged, while hinting that another 25 basis point hike could be possible before the end of the year.

While acknowledging the progress made so far and market and consumer expectations that inflation will continue to decline, Kashkari saidThe neutral interest rate may have risen at present and policy needs to be tightened。

Dollar index daily chart

At 11:02 on September 27, Beijing time, the US dollar index was reported at 106.26.