Fed's Kashkari: Inflation Still Too High Despite Softer PCE Data
Minneapolis Fed President Neel Kashkari warned inflation remains elevated even after cooler PCE readings, while calling the labor market 'pretty good.'
Minneapolis Federal Reserve President Neel Kashkari said inflation remains "still too high" despite a softer-than-expected reading in the latest Personal Consumption Expenditures price index, signaling continued caution from at least one Fed policymaker on the pace of potential rate cuts.
Kashkari made the remarks during an exclusive interview with CNBC's Steve Liesman on Wednesday evening, offering one of the more hawkish assessments from a regional Fed president in recent weeks. His comments underscore the broader tension within the Fed as policymakers weigh cooling price pressures against the risk of easing monetary policy too soon.
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On the employment side, Kashkari offered a more upbeat assessment, describing the labor market as "pretty good" — language that suggests he does not view job-market weakness as a reason to rush toward rate reductions. A resilient labor market typically gives Fed officials more room to hold rates elevated until inflation moves convincingly toward the 2% target.
The PCE index, the Fed's preferred inflation gauge, came in softer than analysts had anticipated in the most recent release, fueling market speculation about the timing of future rate cuts. Kashkari's remarks serve as a reminder that a single favorable data point is unlikely to shift the Fed's cautious stance, particularly among members who remain focused on sustained disinflation before adjusting policy.
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