Fed's Kashkari says central bank must lower inflation pressures
TLT•Minneapolis Fed President Neel Kashkari said inflation remains too high and expects the central bank to raise rates again depending on economic performance. The Fed’s target rate was raised by a quarter percentage point to 3.75%-4% at its September meeting.
1. Inflation remains too high
Kashkari said the latest inflation data did not change his view that inflation is still too high, but he is confident monetary policy can bring it back to the Fed’s target. He said officials’ September projections for another rate increase this year were a snapshot based on information available at the time.
2. Markets and rate outlook
The Fed raised its overnight target rate by a quarter percentage point at its September 15-16 meeting, to a range of 3.75%-4%, and officials penciled in one more increase before year-end. Kashkari said markets were signaling policy may need to be tighter than officials expect, but cautioned against blindly following market judgments.
