Fed's Kashkari: not stopping rate hikes until inflation peaks

Follow us on Google News:
 Fed's Kashkari: not stopping rate hikes until inflation peaks
Image source: ©2022 Kalkine Media®

(Adds comments, background)


Nov 17 (Reuters) -

It's hard to know how high the U.S. central bank will need to raise interest rates, Minneapolis Federal Reserve Bank President Neel Kashkari said on Thursday, but it should not stop until it's clear that inflation has peaked.

"I need to be convinced that inflation has at least stopped climbing, that we're not falling further behind the curve, before I would advocate stopping the progression of future rate hikes," he told the Minnesota Chamber of Commerce in an event webcast by the regional Fed bank. "We're not there yet."

Recent data showing consumer and wholesale prices cooled in October provide "some evidence that inflation is at least plateauing," he said, but "we cannot be overly persuaded by one month's data."

The Fed has raised rates aggressively this year, and Kashkari reminded his audience Thursday that the full effects of those rate hikes could take a year before they are felt economy-wide.

But inflation is running at more than three times the Fed's 2% target, and Fed policymakers are committed to restraining demand through higher borrowing costs to bring demand into better alignment with the available supply of labor, goods and services.

"It's an open question of how far we are going to have to go with interest rates to bring that demand down in the balance," he said. (Reporting by Ann Saphir; Editing by Mark Porter and Andrea Ricci)

Disclaimer

The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Featured Articles