Kashkari says Fed may need another rate hike to curb stubborn inflation

At a Council on Foreign Relations event, Minneapolis Fed President Neel Kashkari said the central bank will likely raise rates again if economic conditions warrant, as inflation remains above target. He explained that the September FOMC’s projection of an additional hike was based on the data available at the time and that current price data still show inflation too high. Kashkari recalled that a decade ago he would not have imagined five years of elevated inflation, yet he believes monetary policy can still bring inflation back to 2%.

He warned that while markets are signaling possible tighter policy, the Fed should not follow those signals blindly. The recent September meeting raised the overnight target rate by a quarter point to a range of 3.75%-4%, reflecting concerns over inflation that has exceeded the 2% goal for more than five years. Robust growth and labor market stability give the Fed some flexibility, but the inflation challenge remains central.