Minneapolis Federal Reserve President Neel Kashkari said U.S. inflation pressure is no longer confined to higher energy prices and has spread across multiple parts of the economy, especially services. He said the inflation Americans face is "far more than just oil prices" and that the Federal Reserve still needs to bring inflation back down to its 2% target. Kashkari also said the U.S. economy and labor market remain resilient, leaving the central bank with room to respond to persistent price pressure. He was one of three Fed officials who supported a rate hike in July, reflecting concern that if inflation lasts too long, policymakers may need to tighten more aggressively later. In September, the Fed raised rates by 25 basis points to 3.75%-4%, the first rate increase since 2023. Kashkari did not give a clear signal on the timing of the next hike, but said the Fed has a responsibility to act if inflation pressure continues to broaden.
Minneapolis Federal Reserve President Neel Kashkari said on Sept. 21 that inflation pressure in the United States is no longer limited to rising energy prices and has spread across multiple parts of the economy, especially the services sector.
Kashkari said the inflation facing Americans is "far more than just oil prices," and that the Federal Reserve still needs to push inflation back to its 2% target.
He also said the U.S. economy and labor market remain resilient, giving the Fed room to deal with persistent price pressure. Kashkari was also one of three Fed officials who backed a rate increase in July, citing concern that if inflation lasts too long, policymakers may later need to tighten by a larger amount.
In September, the Fed raised interest rates by 25 basis points to 3.75%-4%, the first rate hike since 2023. Kashkari did not clearly say when the next increase might come, but stressed that if inflation pressure keeps widening, the Fed has a responsibility to take action to restore price stability.
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