Fed's Kashkari: Wage growth is now too high to be consistent with 2% inflation

Eren Sengezer FXStreet

Minneapolis Federal Reserve (Fed) President Neel Kashkari reiterated on Wednesday that inflation in the US is still very high and that their job is to bring it down, as reported by Reuters.

"Wage growth is now too high to be consistent with 2% inflation," Kashkari added and noted that it is concerning that the Federal Reserve's rate hikes so far have not brought down services inflation.

Regarding the next policy meeting, Kashkari said that he was open-minded on a 25 basis points (bps) hike versus 50 basis points increase and noted that overtightening the policy is definitely a risk.

Market reaction

The US Dollar Index stays on the back foot following these comments and was last seen losing 0.55% on a daily basis at 104.35.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD rises to 1.1800 neighborhood amid renewed USD selling and trade uncertainties

The EUR/USD pair regains positive traction during the Asian session on Wednesday and jumps to the 1.1800 neighborhood in the last hour, reversing the previous day's modest losses. The intraday move up is sponsored by the emergence of fresh US Dollar, which continues to be weighed down by persistent trade-related uncertainties.

GBP/USD remains stronger above 1.3500 following Trump’s State of the Union

GBP/USD remains in the positive territory for the fourth successive session, trading around 1.3510 during the Asian hours on Wednesday. The pair appreciates as the US Dollar remains subdued following US President Donald Trump’s first State of the Union address of his second administration before a joint session of Congress.

Gold re-attempts $5,200 amid tariffs and geopolitical woes

Gold buyers are back in the game early Wednesday after seeing a correction from monthly highs on Tuesday. The US Dollar slips after Trump’s SOTU fails to impress and as AI-driven worries ease. Dovish Fed bets also weigh. Gold looks north so long as the key 61.8% Fibo resistance at $5,142 holds on the daily chart.

Bitcoin, Ethereum and Ripple post cautious recovery amid downside risks

Bitcoin, Ethereum, and Ripple are posting a cautious recovery on Wednesday following a market correction earlier this week. BTC is approaching a key breakdown level, while ETH and XRP are rebounding from crucial support levels.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.