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Today, Minneapolis Fed President Neel Kashkari said the Fed may need to do more to achieve its 2% inflation target. This comes against the backdrop of recent strong economic data.
Kashkari expressed his thoughts in an interview with Bloomberg Television. He noted that sustained high levels of economic activity could indicate that policies may be less stringent than currently assumed. “With economic activity continuing to be so hot, it makes me question whether policy will be as tight as we currently assume,” Kashkari said.
If inflation rises as economic activity continues to be strong, it would be a sign that additional measures may be needed, he added. For now, Kashkari sees no clear signs of economic weakness.
The Federal Reserve last week maintained its benchmark interest rate from 5.25% to 5.50%. However, it said it was open to the possibility of further increases in borrowing costs to bring inflation back to target.
Kashkari’s statement was consistent with comments he made on Monday, in which he mentioned the Fed had more work to do to control price pressures.
Reuters contributed to this article.
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