Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari noted on Tuesday that while the Fed has many reasons to feel confident about its long-running battle with transitory inflation, it still may be too soon to declare outright victory. Key US Consumer Price Index (CPI) figures expected in the midweek are anticipated to show a slight upswing in annualized headline inflation figures.

Key highlights

I continue to be surprised by US economic resilience.

It looks like the strong labor market and the strong economy will continue.

The Fed won't model Trump policies' effect on economy until they become clear.

The tariff is a one-time increase in prices, that's not inflationary in itself.

I don't want to declare victory on inflation, but good reason for confidence.

It may take a year or two to get all the way down to 2% inflation given dynamics in housing.

The robust labor market is encouraging and the economy looks in strong position.

If inflation surprises to upside before December, that might give us pause.

In a higher productivity environment, neutral rate is higher, meaning the Fed has less room to cut.