Kashkari: 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 will continue a "balanced approach" to its dual mandate of price stability and full employment. He noted inflation has stayed above the Fed's 2% target for more than five years, while the labor market is "in decent shape." Kashkari warned that prolonged high inflation risks unanchoring inflation expectations, which could require a more aggressive policy response. He attributed global inflationary pressures to the Covid-19 pandemic, tariffs, the war in Ukraine, and the conflict in Iran, with current surges driven by energy and fertilizer prices. On artificial intelligence, Kashkari said its long-term impact on monetary policy is "still too soon to know." 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 right now," according to Kashkari.
U.S. headline inflation stood at 3.8% in April; core CPI increased 0.4% month-over-month and 2.8% year-over-year.
Kashkari attributed global inflationary pressures to the Covid-19 pandemic, tariffs, the war in Ukraine, and the conflict in Iran.
He said the current inflation surge is driven by energy and fertilizer prices.
Kashkari stated that if AI leads to sustained higher productivity, higher rates could be sustained.
He said the impact of AI on monetary policy is "still too soon to know."
Kashkari said he "doesn't love" filling out the dot plot because the future is uncertain, and welcomed a fresh discussion on Fed communication under new Chair Kevin Warsh.
Key figures
Neel Kashkari, Minneapolis Federal Reserve President
Kaori Enjoji, CNBC correspondent
Kevin Warsh, Chair of the Federal Reserve (succeeded Jerome Powell)
Jerome Powell, former Chair of the Federal Reserve
Sources: CNBC
