
Fed May Need to Take Additional Steps to Bring US Inflation Back to 2%
The Federal Reserve may need to take additional measures to reduce inflation back to its 2% target due to the recent strong economic data, according to Neel Kashkari, President of the Minneapolis Fed Bank. In a recent interview, Kashkari expressed concern about the current economic activity levels, stating, “When activity continues to run this hot, that makes me question if policy is as tight as we assume it currently is.” He suggested that if inflation rises again alongside robust economic activity, it might indicate that more intervention is necessary.
Kashkari mentioned that he does not currently see significant signs of economic weakening.
Last week, the U.S. central bank kept its benchmark interest rate steady, ranging from 5.25% to 5.50%, while remaining open to the possibility of increasing borrowing costs to achieve the target inflation rate. Kashkari’s remarks are consistent with his earlier comments indicating that the Fed still has work to do to address inflationary pressures.