Kashkari keeps October rate call open, says more hikes likely

Minneapolis Federal Reserve (Fed) President Neel Kashkari said on Thursday he is unsure about an October rate hike but remains "open-minded about how fast the Fed should raise interest rates," while indicating he still sees more hikes ahead. The comment represents a direct policy signal from a senior Fed official at a time when markets are parsing the timing and pace of further tightening.

Kashkari keeps October meeting open

Kashkari's remarks leave the October Federal Open Market Committee meeting as a live possibility rather than a foregone conclusion. His admission of uncertainty on the timing, combined with a view that additional hikes are likely, highlights a balance between conditional tightening and flexibility on pace. That stance may complicate efforts to pin down the near-term policy path and suggests Fed communications will remain important for shaping expectations.

Why this matters for Forex traders and key instruments

Currency markets are sensitive to shifts in expectations about Fed policy, and Kashkari's comments touch on two main drivers: the timing of the next rate move and the speed of subsequent increases. Traders and analysts may interpret his openness on pace as a signal that policy moves will respond to incoming data rather than following a fixed timetable.

• DXY — Overall dollar sentiment may remain sensitive to evolving views on Fed tightening and US yield dynamics.
• EUR/USD and GBP/USD — Major dollar crosses may be influenced by any change in perceived US rate trajectory relative to other central banks.
• USD/JPY — This pair often reflects differences in monetary policy expectations and US Treasury yields, which may be influenced by Fed communications on pace and timing.

Because Kashkari emphasized both uncertainty on October and a willingness to raise further, markets may place greater weight on incoming US data and subsequent Fed commentary when forming short-term views on these instruments.

Looking ahead, markets will monitor the October Fed meeting outcome and further statements from Fed officials for clearer guidance on the timing and pace of future rate increases. Such communications are likely to remain key drivers of US yields and dollar-linked FX moves.