Minneapolis Fed President Neel Kashkari said yesterday that Fed moved too slowly in 2021 in tackling high inflation. He’s concerned that inflation is pulling wages up and there are risks of going into a wage-driven inflation story. As inflation is spreading, he said that Fed need to act with urgency.
There are some financial markets that are indicating that Fed will cut interest rates in 2024. But Kashkari said, “I don’t want to say it’s impossible, but it seems like that’s a very unlikely scenario right now given what I know about the underlying inflation dynamics.”
“The more likely scenario is we would continue raising (interest rates) and then we would sit there until we have a lot of confidence that inflation is well on its way back down to 2%,” he said.
