Business

Fed’s Jefferson urges patience on rates; Kashkari sees more hikes ahead

By Sohail Khan 2 October 2026, 1:12 am

Benchmarks
Nifty22,421.95-198.5

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
19.86 %

Invest Now

Enter search text:

Business News›Markets›US Stocks›Wall St Guide›Fed’s Jefferson urges patience on rates; Kashkari sees more hikes ahead

Read Today's Paper

Fed’s Jefferson urges patience on rates; Kashkari sees more hikes ahead
Synopsis

Federal Reserve Vice Chair Philip Jefferson stated that he sees no immediate need for further interest rate adjustments. He emphasized that future decisions would depend on analyzing economic data trends and risks. Minneapolis Fed President Neel Kashkari expressed uncertainty regarding the timing of the next rate hike amidst strong economic performance. Both officials acknowledged the ongoing challenges of managing inflation that exceeds the 2% target.

Federal Reserve Vice Chair Philip Jefferson said Thursday that while he supported last month’s interest-rate increase, he saw no urgency for the US central bank to act again, according to Reuters.

“Any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks,” Jefferson said in prepared remarks for the University of Virginia’s Darden School of Business.

With financial markets “reassessing” the outlook amid rising bond yields, Jefferson added that “my colleagues and I will need to come to our own judgment, which may take more time,” before deciding on the next move.

For live updates on US Markets, click here

“With more data in hand, such trends may allow for better discernment, as may the appropriate stance of monetary policy,” he said further.

The Fed raised its benchmark rate by a quarter-percentage point to 3.75%-4.00% at its September 15-16 meeting. Policymakers’ projections indicated one more increase before the end of 2026.

New York Fed President John Williams on Tuesday also said that policymakers had time to assess additional data, though he still expected another increase before year-end. Financial markets broadly expect the Fed to leave rates unchanged at its October 27-28 meeting.

Jefferson expects inflation to remain “elevated” in the near term “before resuming its decline toward our 2% goal as the effects of energy and other price shocks fade.”

However, he added: “I view risks to my inflation forecast as tilted to the upside due to recent geopolitical developments and stronger-than-anticipated aggregate demand.”

Jefferson described risks to economic activity and employment as “roughly balanced”. He said the economy was “likely to show continued resilience … by adding jobs and extending a six-and-a-half-year-long expansion.”

Fed’s Kashkari expects more rate hikes, but is unsure about October

Minneapolis Fed President Neel Kashkari said on Thursday that additional rate increases would probably be necessary to restrain the economy through 2027, although he was uncertain whether the next move should come in October.

“I’m open-minded” about how the Fed proceeds, Kashkari told Reuters. He added that “I don’t have a strong view” on whether policymakers should raise rates at their October 27-28 meeting. The Fed’s final meeting of the year is scheduled for December 8-9.

Kashkari, who voted for last month’s rate increase, projected one more quarter-point hike this year and another in 2027.

Since the September meeting, “the data that I’ve gotten suggests the economy is doing even better than I anticipated” while “inflation is still too elevated,” he said.

“If the economy proves to just be incredibly resilient and inflation therefore is probably stickier than I appreciate, then policy could need to go higher yet than I’m anticipating at this moment. But I don’t know” whether that scenario will materialize, Kashkari said.

The Fed raised rates last month to curb inflation that has exceeded its 2% target for more than five years. Kashkari had also dissented in favor of an increase at the July policy meeting.

Although the latest rate increase contributed to a sharp rise in long-term borrowing costs, Kashkari said monetary policy was not doing much to restrain the economy.

“The labour market looks quite healthy right now. It seems like the economy is doing quite well. And when I look at that constellation, that says, boy, policy is probably not particularly restrictive right now,” he said.

Kashkari said financial markets were functioning properly despite recent volatility and that the Treasury market had absorbed the repricing without disruption.

“I’m not seeing any evidence of systemic risk” in markets, he said. “I do think the banking sector bears watching closely, and we are (watching)” because of the rapid shift in borrowing costs.

He also said monetary policy under Fed Chair Kevin Warsh was influencing markets.

“If you look at long rates moving as much as they’ve moved over the last several weeks, part of that is real economic developments,” Kashkari said. “I think part of that is hey, the Fed is really serious, the Warsh Fed, it’s not talk, the Warsh Fed is really serious about controlling inflation.”

“I’ve got some confidence that inflation’s heading back down over the next couple of years to our 2% target, but shocks keep surprising us,” he added.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The )

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our ETMarkets WhatsApp channel)

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

…moreless

(You can now subscribe to our ETMarkets WhatsApp channel)

Read More News on
Federal Reserveinterest ratesPhilip JeffersonNeel Kashkariinflation

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

…moreless

Enter search text:

BrowseCompanies:
ABCDEFGHIJKLMNOPQRSTUVWXYZ
123456789

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year