Kashkari Warns: Inflation Still Too High, Despite Interest Rate Hike

Minneapolis Federal Reserve President Neel Kashkari stressed that inflation is still too high in all aspects of the US economy, not just rising oil prices. He made this statement after supporting a unanimous vote to raise interest rates by a quarter percentage point to 3.75%-4.00%. This decision was made despite three officials dissenting at the Fed's prior meeting for a hike when the majority of the Federal Open Market Committee opted to leave rates unchanged.

Kashkari emphasized that even if they strip out energy and food, which are volatile and matter a lot, inflation is still too high. He pointed out that projections released along with the rate-hike decision showed all but two Fed policymakers see at least one more quarter-point increase this year. The Fed's goal is to get inflation back down to its 2% target.

Kashkari acknowledged that there is nothing the Fed can do with interest rates that might result in opening up the Strait of Hormuz or bringing down oil prices. He expressed hope for help from other parts of government or the real economy.