Kashkari: US Inflation Still Too High Across All Sectors
Minneapolis Federal Reserve President Neel Kashkari stated that inflation is still too high across all sectors of the US economy, not just in rising oil prices. He supported the unanimous vote to raise interest rates by a quarter percentage point to 3.75%-4.00%, which was decided last week.
Kashkari emphasized that even if they strip out energy and food, which are volatile components, inflation is still too high, affecting various aspects of the economy.
The projections released along with the rate-hike decision showed all but two Fed policymakers see at least one more quarter-point increase this year. Rate futures markets reflect a two-in-three chance that the Fed's policy rate ends 2026 in the 4.00% to 4.25% range, with a strong likelihood of it climbing by at least another quarter point beyond that by mid-2027.
Kashkari stressed that the inflation the American people are feeling is much beyond just oil prices and that there's nothing the Fed can do with interest rates to open up the Strait of Hormuz or bring down oil prices. He hopes for help from other parts of government or the real economy to bring inflation back down.