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Kashkari: US Inflation Remains High Across Sectors

By Markets Desk · · 1 min read
A close-up of a traditional brass balance scale with empty pans
Illustration: Tradingbird, based on a photo published by CNBC

Minneapolis Fed President Neel Kashkari stated that inflation is too high across all sectors of the US economy, rejecting the view that energy prices are the sole driver.

Inflation remains above the Federal Reserve target across all sectors of the US economy. Minneapolis Fed President Neel Kashkari made this statement on Sunday. He noted that high prices extend beyond volatile energy and food costs. The issue is structural and broad-based.

Kashkari supported the recent unanimous decision to raise rates. The move lifted the benchmark to a range of 3.75% to 4.00%. This follows a quarter-point increase at the latest policy meeting. He had previously dissented in favor of a hike when the majority held rates steady.

Broad-Based Price Pressures

Kashkari told CNBC that the inflation Americans feel is not limited to oil. It is present in the services sector and other areas. He stated that the Fed cannot use interest rates to open the Strait of Hormuz. Monetary policy tools are insufficient for geopolitical disruptions.

The central bank aims to return inflation to its 2% target. Kashkari believes the current tools are sufficient for domestic price pressures. He called for support from other parts of government. The real economy must also contribute to cooling demand.

Geopolitical Risks to Supply Chains

Crude oil prices surged due to intensified hostilities in the Middle East. The US and Iran attacked oil tankers in the Strait of Hormuz. Saudi Arabia closed its East-West pipeline after aerial attacks. These events have removed key supply channels from the market.

Fed Leadership Aligns on Outlook

Kashkari’s views align with Fed Chairman Kevin Warsh. Warsh estimated core inflation was likely around 3.6% in August. He noted that many categories are posting increases above 3%. This trend is visible on both six-month and twelve-month bases.

The official data for this period is not yet released. The Fed will publish the figures later this month. The consensus among officials is that price stability has not been achieved. Further tightening may be required if trends persist.

Based on reporting by CNBC, compiled by the Tradingbird desk.

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