Fed’s Kashkari: biggest fear is inflation will be more persistent
2022.08.24 02:57
FILE PHOTO: President of the Federal Reserve Bank on Minneapolis Neel Kashkari listens to a question during an interview in New York, U.S., March 29, 2019. REUTERS/Shannon Stapleton
(Reuters) – Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday his biggest fear is that the Fed and financial markets are underestimating underlying inflation pressures, and beating inflation will require even more aggressive rate hikes than he currently expects.
Kashkari is already the most hawkish of all the central bank’s 19 policymakers, and expects the Fed to need to lift its policy rate, now at 2.25%-2.5%, another two full percentage points by the end of next year. He would want to see “compelling” evidence that inflation is falling towards the Fed’s 2% target before easing up on rate hikes, he said.
