(Sharecast News) - Two top US central bank official sounded a hawkish note on the outlook for monetary policy despite data published earlier the same day that some hoped showed that consumer price inflation had peaked.
Speaking at the Aspen Economic Strategy Group's 2022 annual meeting, the head of the Federal Reserve Bank of Minneapolis said he wanted to see short-term official interest rates at 3.9% by year-end 2022 and at 4.4% by the end of 2023.
Neel Kashkari pushed back on market pricing for interest rate cuts early in 2023.
"I think a much more likely scenario is we will raise rates to some point and then we will sit there until we get convinced that inflation is well on its way back down to 2% before I would think about easing back on interest rates," the central banker said.
Speaking earlier, his peer at the Chicago Fed, Charles Evans, made the case for the Fed funds target range to end 2022 at 3.25-3.50%, which was in line with the pricing on Fed funds futures, but to then rise to 3.75-4.0% by end 2023.
As of Wednesday's close, July 2023 Fed funds futures were assigning roughly 70% odds that the target range would still be at 3.25-3.50% and a 20% chance of a 25bp rate cut.