Fed's Kashkari Warns Against Early Celebrations In Inflation War: 'Under-Tightening Will Not Get Us Back To 2% In Reasonable Time'
The President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, cautions that it is too soon to declare victory over inflation, despite encouraging signs of easing price pressures.
What Happened: Kashkari emphasized the importance of additional data to confirm the successful management of inflation during a recent Fox News interview, as reported by Bloomberg. He highlighted the necessity of continued data monitoring, despite three months of promising inflation figures.
He also voiced concern about potential hikes in inflation, stating that the risk of tightening monetary policy excessively outweighs the damage of doing too little. “Under-tightening will not get us back to 2% in a reasonable time,” Kashkari insisted during a discussion with the Wall Street Journal.
Last week, interest rates were held steady at a range of 5.25% to 5.5%, a level not seen in 22 years. While Federal Reserve Chair Jerome Powell suggested the central bank might be done with raising interest rates, Kashkari maintained that it’s too early to conclude on future interest-rate hikes.
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