Minneapolis Fed President Kashkari: Uncertain if Federal Reserve is Finished Raising Interest Rates

Minneapolis Federal Reserve Bank President, Neel Kashkari, expressed uncertainty on Wednesday regarding whether the Federal Reserve will continue raising interest rates, despite a plethora of evidence suggesting a strong economy. The statement was accompanied by a photo taken in January 2022 (2023 Reuters/Joshua Roberts).

Central Bank’s Rate Hikes Remain Ambiguous

According to Neel Kashkari, President of the Minneapolis Federal Reserve Bank, the certainty of the Federal Reserve’s decision to halt interest rate hikes remains uncertain despite ample data supporting the strength of the economy.

In an interview with CNBC, President Kashkari highlighted the persistent challenge of bringing inflation back to its 2% target, indicating that the current rate hikes may not be sufficient. The Federal Reserve, however, anticipates no interest rate adjustments for the upcoming year following last year’s increase.

Quantifying the Impact of Monetary Policy

President Kashkari maintained that the effectiveness of the Federal Reserve’s monetary policy in swiftly reducing inflation remains unclear, emphasizing the reliance on forthcoming data for future policy decisions. Despite the concerted tightening of monetary measures, sectors such as housing and automobiles continue to demonstrate resilience, consumer spending remains robust, and overall economic activity continues to grow significantly. “There is,” he affirmed.

During the Federal Open Market Committee (FOMC) meeting held on September 19-20, the Federal Reserve elected to maintain the current interest rates. However, President Kashkari reaffirmed his hawkish stance, foreseeing further rate hikes before the year’s end. He also indicated that monetary policy will remain more restrictive than originally anticipated until 2024.

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Minneapolis Federal Reserve Bank President Kashkari said Wednesday that it remains to be seen whether the Federal Reserve is done raising interest rates, despite plenty of evidence that the economy is doing well. Photo taken in January 2022 (2023 Reuters/Joshua Roberts)

[ニューヨーク ２７日 ロイター] – Minneapolis Federal Reserve Bank President Kashkari said Wednesday that it remains to be seen whether the Federal Reserve is done raising interest rates, despite ample evidence that the economy is doing well.

Governor Kashkari said on CNBC that it is not yet possible to say that the central bank has raised rates enough to bring inflation back to its 2% target. At the same time, the bank said it expects interest rates to remain unchanged next year after last year’s increase.

He also said that it was unclear from the current economic situation whether the Fed’s monetary policy would be able to reduce inflation quickly, and he noted that future monetary policy would depend on data. Despite the significant tightening of monetary policy, the housing and automobile sectors are resilient, consumer spending is strong, and overall economic activity is still growing strongly. “There is,” he said.

The Federal Reserve decided to keep interest rates unchanged at the Federal Open Market Committee (FOMC) meeting held on September 19-20. However, he strengthened his hawkish stance, expecting further rate rises by the end of the year and predicting that monetary policy will remain much tighter than previously expected through 2024. See more

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