Minneapolis Federal Reserve Chairman Neel Kashkari said on Tuesday that while the US central bank has made some progress in its battle against inflation, interest rates may still need to rise to finish the job of cutting rates.
This comes in light of the investors' anticipation today for the minutes of the US Central Bank's meeting for the month of July, to explore the path of the next strategy related to interest rates.
I'm not ready to say we're done raising interest rates, Kashkari said at the APi Group's Global Watchers Conference in Minneapolis. But with signs of inflation slowing in recent months, he said: I see positive signs that we are on the right path to reduce inflation, as there is still more time to get more data before we decide whether we need to raise interest or not. .
The Fed has raised its benchmark interest rate target by 5.25 percentage points since March 2022 to fight the fastest inflation in 40 years, including a quarter-point hike last month to a range of 5.25% to 5.00%.
Annual inflation has fallen by the Fed's preferred measure -- the personal consumption expenditures price index -- from last summer's peak of 7% to 3% in June.
The Fed is far from cutting rates
However, Kashkari noted that core inflation, which excludes volatile energy and food prices, is still more than double the Fed's 2% target, and he needs convincing evidence that it is falling further to feel confident that the Fed has done enough. .
Meanwhile, he added, the Fed is very far away from cutting interest rates, although a cut next year is a possibility if inflation continues to fall.
He said that the labor market is very tight, and with economic growth continuing to exceed expectations, there is no indication that a recession is imminent. However, he said that higher interest rates could cause the economy to slow down over time.
