Kashkari says inflation fight top priority, labor market ‘in decent shape’
9 reported
Minneapolis Federal Reserve President Neel Kashkari stated Thursday that reducing inflation remains his top priority, describing consumer prices as “much too high.” Speaking to CNBC at the Bank of Japan-IMES Conference, Kashkari said the U.S. central bank is taking a “balanced approach” to its dual mandate of price stability and full employment. He noted that inflation has stayed above the Fed’s 2% target for more than five years, while the labor market is currently in “decent shape.” Kashkari warned that prolonged high inflation risks unanchoring inflation expectations, which could require more aggressive policy responses. He attributed global inflationary pressures to the Covid-19 pandemic, tariffs, the war in Ukraine, and the conflict in Iran, with the current surge driven by energy and fertilizer prices. On artificial intelligence, Kashkari said its long-term impact on monetary policy remains uncertain, though he is “bullish” on its prospects. The remarks come as the Fed begins a new chapter under Chair Kevin Warsh, who succeeded Jerome Powell.
What’s reported
Kashkari said bringing down inflation is his top priority, calling consumer prices “much too high.”
Inflation has remained above the Fed’s 2% target for more than five years.
The labor market is in “decent shape,” according to Kashkari.
U.S. headline inflation stood at 3.8% in April; core CPI increased 0.4% and 2.8%, respectively.
Kashkari attributed global inflationary pressures to the Covid-19 pandemic, tariffs, the war in Ukraine, and the conflict in Iran.
He said the current surge is driven by energy and fertilizer prices.
Kashkari said he is “bullish” on AI’s long-term prospects but its impact on monetary policy is “too soon to know.”
The Fed is now under Chair Kevin Warsh, who succeeded Jerome Powell.
Kashkari said he does not “love” filling out the dot plot because the future is uncertain, and welcomed a fresh discussion on Fed communication.
Key figures
Neel Kashkari, Minneapolis Federal Reserve President
Kaori Enjoji, CNBC correspondent
Kevin Warsh, Chair of the Federal Reserve
Jerome Powell, former Chair of the Federal Reserve
Sources: CNBC
