Minneapolis Federal Reserve President Neel Kashkari said Sunday that inflation remains elevated across all sectors of the U.S. economy, extending beyond volatile energy prices.
Speaking on Fox News' "Sunday Morning Futures," Kashkari emphasized that core inflation metrics still register too high. "Even if we strip out energy, which is really volatile, and strip out food—inflation is still too high," he said.
Kashkari supported the Federal Open Market Committee's unanimous decision last week to raise interest rates by a quarter percentage point, bringing the target range to 3.75%-4.00%. He had previously dissented at the Fed's prior meeting, advocating for a rate hike when the majority opted to maintain unchanged rates.
Federal Reserve Chair Kevin Warsh estimated that inflation, as measured by the Fed's preferred gauge, was likely around 3.6 percent in August. "Too many categories are still posting increases above 3 percent, on both a six- and 12-month basis," Warsh said at his press conference following the meeting.
Rate futures markets currently reflect a two-in-three chance that the Fed's policy rate will finish 2026 in the 4.00%-4.25% range, with significant probability of an additional quarter-point increase by mid-2027. Projections released with the rate decision show all but two Fed policymakers anticipate at least one more quarter-point increase this year.
Kashkari noted that monetary policy cannot resolve geopolitical issues driving oil prices higher, such as Middle East conflicts. But he stressed that the inflation Americans experience extends across services and other sectors well beyond energy. "The inflation that the American people are feeling every day is much beyond just oil prices," he said.
Despite global headwinds including tariff disputes and conflicts in Ukraine and Iran, Kashkari observed that economic growth has remained robust, describing the American economy as "very resilient." He expressed hope that as international conflicts recede, disinflation could accelerate.
