Kashkari Warns US Economy Still Suffering from Elevated Inflation

Minneapolis Federal Reserve President Neel Kashkari stated that inflation is still too high across various sectors of the US economy, not just in rising oil prices. He emphasized that even if energy and food costs are stripped out, inflation remains a concern.

Kashkari supported the recent decision to raise interest rates by a quarter percentage point to 3.75%-4.00%. This move was made despite some dissent within the Federal Open Market Committee at the previous meeting, where Kashkari had advocated for an increase in rates.

The ongoing Middle East conflict has led to increased crude oil prices, but Kashkari emphasized that the Fed's primary goal is to reduce inflation back down to its 2% target. He acknowledged that interest rate adjustments cannot directly impact global events or commodity prices.

Kashkari's comments echo those of Fed Chairman Kevin Warsh, who estimated that inflation, as measured by the Fed's preferred gauge, was likely around 3.6% in August.