RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks 
Minneapolis Fed President, who is a voting member in this year’s FOMC stand out among the policymakers who have been calling for faster rate hikes in 2017. Some of the well-known doves of FOMC shifted their camps in recent weeks but during an interview with the Reuters, Mr. Kashkari indicated that he would maintain his dovish outlook with regard to interest rates.
Mr. Kashkari believes that the US labor market has more room to run and he remains cautiously optimistic of the recent trend where in the past 18 months, more workers have returned to the workforce. He said that while wages are rising and hope that the trend would continue, he believes it has yet not reached alarming levels. He said that the Fed aims to let the economy run as fast as it can as long as the inflation is low.
With regard to fiscal policies, Mr. Kashkari said that he hasn’t factored them in his forecasts yet due to lack of clarity.
These comments from Mr. Kashkari doesn’t change our FOMC dashboard for March meeting, which as of now looks like below,
Doves – Neel Kashkari.
Hawks – Janet Yellen, Charles Evans, Patrick Harker, Stanley Fischer, William Dudley, Lael Brainard, and Robert Kaplan
Unknown – Jerome Powell
Pls. note that one of the dovish members, Daniel Tarrullo has resigned and the position is yet to be filled.
