Minneapolis Federal Reserve President Neel KashkariOn Monday, Mr. Smith stated that inflation would return to normal. But he said it might take longer than anticipated.
Recognizing that he had been on the “team transitory”, believing that rising prices would end soon, he stated that supply-demand imbalances continue to drive up these high prices. highest inflation levels in more than 40 years.
Although the Fed can reduce demand through its monetary policies, it can’t increase supply.
CNBC’s “I am confident that we will get inflation down to our target of 2%,” he said to CNBC.Squawk BoxInterview. But I’m not sure how heavy that burden will be and how we can get help from the supply.
He made his comments less than one week after Federal Open Market Committee. raised benchmark ratesA half-point increase. This was the biggest increase in currency in 22 years. It sets the scene for similar moves over the coming months.
Although Kashkari has always favored lower rates, looser monetary policies and lower interest rates historically, he voted for the increases in this year’s budget as they are necessary to stop spiraling inflation. However, he noted that those on the lowest wage end will bear the brunt of tighter policy.
He stated that it is the Americans with the lowest incomes who suffer the most from rising prices. However, your policies to reduce inflation directly impact those Americans. This could be done by increasing the price of a mortgage or by doing so much to prevent the economy going into recession. Their jobs are the most at-risk.
“So we all know this is an important challenge. However, we also recognize that inflation at such high levels doesn’t benefit anyone. It’s detrimental to the long-term potential of the economy for any income group.
On Wednesday, data from the government on consumer prices will be released. Then, Thursday’s April producer price information will follow.
According to Dow Jones estimates, economists believe that inflation will slow down a little in April. The headline consumer price index is expected to increase by 8.1% over the last year and to rise 6% without food or energy. This compares with March’s rises of 6.5% and 8.5%.
Kashkari said that these numbers offer some comfort, but conditions are still difficult so long as supply and demand remain imbalanced.
He said, “We need to continue paying attention to data.” The most recent inflation data from some measures shows that it is somewhat softer than expected. Maybe there is some evidence of things starting to ease a little. We just have to pay attention and wait to see what the data tells us before drawing any conclusions.
