Kashkari: U.S. Inflation Spreads to Services, Fed Must Continue to Lower Prices

On September 21, Minneapolis Fed President Kashkari stated that inflationary pressures in the U.S. have spread to multiple sectors, particularly in services. He pointed out that the inflation faced by the American public is not limited to oil prices, and the Fed must continue to push inflation back to the 2% target. Kashkari believes that the U.S. economy and labor market remain resilient, giving the Fed room to respond to ongoing price pressures. He was one of the three Fed officials who supported rate hikes in July, concerned that prolonged inflation would require more significant tightening of policies. The Fed raised interest rates by 25 basis points to 3.75% - 4% in September, marking the first rate hike since 2023. Kashkari did not specify the timing of the next rate hike but emphasized that if inflationary pressures continue to expand, the Fed has a responsibility to take measures to restore price stability.