Minneapolis Federal Reserve Bank President Neel Kashkari has endorsed an overtightening monetary policy to reach the central bank’s 2% inflation target, according to a discussion in the Wall Street Journal today. This stance comes as he highlighted the need for further data before determining interest rate adjustments and expressed concern over potential inflation surpassing 2%.
Kashkari’s comments were informed by specific price and wage data, and they underscored the resilience of the American economy, a strong job market, and steady consumer spending. However, he emphasized that additional work from the Federal Reserve is necessary for controlling inflation, expressing nervousness over declaring an early win on this front.
Just yesterday, Kashkari had warned of inflation risks in the Wall Street Journal, stating that a policy of monetary caution might not swiftly achieve the 2% target. He pointed towards economic indicators that suggest a worrisome prospect of inflation potentially surpassing 2%, highlighting the need for more data before setting interest-rate steps amid current economic instability.
Kashkari’s remarks today facilitated a recovery of the US Dollar (USD) from a six-week low, underscoring the lead of the US economy over foreign counterparts.
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