Kashkari Warns of Elevated US Inflation Despite Interest Rate Hike
Minneapolis Federal Reserve President Neel Kashkari emphasized that inflation remains a concern 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%. Even after stripping out volatile energy and food prices, Kashkari believes inflation is still too high.
Kashkari acknowledged that the Federal Reserve's job is to bring down inflation to its 2% target, but he noted that interest rates cannot solve issues like oil prices or conflict in the Middle East. He expressed hope for help from other parts of government or the real economy.
The Fed chairman, Kevin Warsh, also expressed concerns about inflation, estimating it was likely around 3.6% in August, although this figure won't be officially released until later this month. Warsh stated that 'too many categories are still posting increases above 3%, on both a 6- and 12-month basis.'