Fed’s Kashkari says inflation is still too high across US economy

Minneapolis Federal Reserve President Neel Kashkari has stated that inflation remains too high across various sectors of the US economy, not solely due to rising oil prices. In an interview with Fox News Sunday Morning Futures, Kashkari emphasized that even when excluding volatile energy and food prices, inflation is still a concern. The Minneapolis Fed president supported the unanimous decision last week to increase interest rates by a quarter percentage point, raising rates to 3.75%-4.00%.

Kashkari was one of three officials who disagreed at the Federal Open Market Committee's previous meeting, when the majority opted to maintain the interest rates unchanged. He explained that the Federal Reserve's objective is to reduce inflation back to its 2% target, but acknowledged that raising interest rates will not influence oil prices or bring them down. The actual inflation felt by American consumers extends beyond just oil prices and can be observed in multiple areas of the economy, including the services sector.

The current inflation situation, according to Kashkari, is more widespread than just oil prices. He stated that the tools available to the Federal Reserve can help bring inflation back down, and hopes that assistance will also come from other government sectors or parts of the real economy. Kashkari's concerns about inflation align with those of Fed Chair Kevin Warsh, who estimated that inflation as measured by the Fed's gauge, was likely around 3.6% in August.

Warsh also noted that multiple categories still show increases above 3%, both on a six-month and 12-month basis.