Fed’s Kashkari: Inflation still too high in ‘all aspects’ of economy

Neel Kashkari, the president of the Federal Reserve’s Minneapolis branch, said Sunday that inflation is “still too high,” days after the central bank raised interest rates.

“Even if we strip out energy, which is really volatile, and strip out food, they matter a lot, but in terms of where the economy is going, inflation is still too high,” Kashkari told host Jackie DeAngelis on Fox News’s “Sunday Morning Futures.”

He later said, “The inflation that the American people are feeling every day is much beyond just oil prices. It’s in all aspects of the economy.”

Annual inflation in August was 3.4 percent, as measured by the consumer price index (CPI). Core inflation, which excludes volatile food and energy prices, was 2.4 percent last month, per the CPI.

Inflation has remained above the Fed’s 2 percent target rate since March 2021, reaching a 40-year high of 9.1 percent in June 2022.

Persistent inflation spurred the 12-member Federal Open Market Committee (FOMC) to raise its baseline interest rate target by a quarter point last week, to a range of 3.75 percent to 4 percent.

The FOMC had not hiked rates since July 2023 and cut rates at its final three meetings of last year. After the unanimous vote, Fed Chair Kevin Warsh said the rate hike “will support a timelier return” to the central bank’s 2 percent target.

“I would be hard-pressed to describe broad financial conditions as restrictive,” Warsh told reporters . “This view was widely shared by the committee, so we removed a dose of accommodation.”

Throughout his four-plus months in charge of the Fed, Warsh has been resolute in saying the central bank will deliver “price stability” for Americans.

Kashkari echoed that sentiment on Sunday, saying the Fed has “tools” to bring inflation back down and is looking for other branches of government and the private sector to boost the economy.

“We’re going to do our part,” the Minneapolis Fed president told DeAngelis. “And then, hopefully, we will get some help from other sectors … of the economy, as things go back to normal.”