Minneapolis Fed President Neel Kashkari just did something that makes crypto investors uncomfortable. He went from projecting a rate cut to projecting a rate hike, all within the span of a few months.
Kashkari announced on June 26 that he now expects one interest-rate increase before the end of 2026, a notable reversal from his earlier expectation of a rate cut. The federal funds target range currently sits at 3.50% to 3.75%, where the Federal Open Market Committee left it after its June 17-18 meeting.
From dove to hawk in one pivot
Nine of the 19 FOMC policymakers now project at least one rate hike in 2026. That’s nearly half the committee signaling that the next move on rates could be upward, not the downward glide path that markets had been pricing in.
Kashkari, who has served as Minneapolis Fed president since 2016 and holds a voting seat on the FOMC this year, pointed to persistent inflation as the primary culprit. But he added a wrinkle that caught attention: massive spending on artificial intelligence infrastructure is contributing to the inflationary pressure.
