USDJPY soars to five-year highs

tweet at 11:04am: Fed's Kashkari says view is two rate hikes this year, previous saw no hike until 2024 $USD tweet at 11:06am: FED'S KASHKARI: THE COSTS OF ENDING UP IN A HIGH-INFLATION REGIME ARE LIKELY TO BE GREATER THAN THE COSTS OF ENDING UP IN A LOW-INFLATION REGIME.Kashkari: Two Opposing Risks On December 15, the Federal Open Market Committee (FOMC) released its latest Summary of Economic Projections (SEP), also known as the “dot plot,” which showed an increase in the median expected path of the federal funds rate over the next few years, relative to the prior SEP, which was published in September. My own submission to the SEP also showed an increase, from zero expected rate increases in 2022 in my September submission to two increases in December. This essay explains the data and considerations that led me to change my outlook for monetary policy. In summary, while my baseline forecast remains that the high inflation consumers and businesses are currently experiencing will likely be transitory, I am putting more weight on the possibility that such transitory high inflation could nonetheless lead to an increase in long-term inflation expectations above our 2 percent target. Hence, I now believe the FOMC