Kashikari on Trump's Tariff Whims: "Fed's Response Is Only to Control Inflation"

CBS Interview
"We Must Anchor Inflation Expectations"
Volatility Expected to Continue

Neel Kashkari, President of the Minneapolis Federal Reserve Bank, stated that the monetary authorities' response to President Donald Trump's confusing tariff policies is solely focused on controlling inflation.

Reuters Yonhap News

On the 13th (local time), Kashkari appeared on CBS's "Face the Nation" and said regarding the recent rise in Treasury yields, "Our job at the Federal Reserve (Fed) is to control inflation so that interest rates do not rise."

Earlier, Kashkari expressed the view that even if the labor market slows down due to President Trump's tariff increases, the policy rate should be maintained to minimize inflationary pressures. The market is increasingly concerned about stagflation, where tariffs cause prices to rise while the economy slows. Kashkari's remarks are interpreted as prioritizing inflation control over economic slowdown.

He emphasized, "Investors in the U.S. and around the world are trying to understand what the U.S. 'new normal' is, and the Fed has no ability to influence that destination. What we can do is anchor inflation expectations and manage the bumps that occur along the way."

Amid recent sell-offs in U.S. stocks and Treasury bonds due to tariff policy uncertainty, financial market turmoil has increased, and market volatility is expected to continue.

Kashkari said, "Markets are functioning and trading is taking place, and this trend will continue, but market participants are trying to figure out how everything will unfold, so volatility is expected."