Fed's Kashkari: not stopping rate hikes until inflation peaks
Reuters
Published Nov 17, 2022 02:07PM ET
Updated Nov 17, 2022 03:02PM ET
(Reuters) -It's hard to know how high the U.S. central bank will need to raise interest rates, Minneapolis Federal Reserve Bank President Neel Kashkari said on Thursday, but it should not stop until it's clear that inflation has peaked.
"I need to be convinced that inflation has at least stopped climbing, that we're not falling further behind the curve, before I would advocate stopping the progression of future rate hikes," he told the Minnesota Chamber of Commerce in an event webcast by the regional Fed bank. "We're not there yet."
Recent data showing consumer and wholesale prices cooled in October provide "some evidence that inflation is at least plateauing," he said, but "we cannot be overly persuaded by one month's data."
The Fed has raised rates aggressively this year, and Kashkari reminded his audience Thursday that the full effects of those rate hikes could take a year before they are felt economy-wide.
But inflation is running at more than three times the Fed's 2% target, and Fed policymakers are committed to restraining demand through higher borrowing costs to bring demand into better alignment with the available supply of labor, goods and services.
"It's an open question of how far we are going to have to go with interest rates to bring that demand down in the balance," he said.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.