Fed’s Kashkari Questions Policy Tightness, Signals Further Rate Hikes Amid Resilient Economy

• Fed’s Kashkari sees inflation at 3% and a resilient US economy.
• Questions current policy tightness, suggesting it may not be restrictive enough.
• Anticipates one more rate hike this year and another in 2027.

Minneapolis Federal Reserve President Neel Kashkari stated that inflation remains elevated at approximately 3%, while the US economy continues to show surprising resilience with robust consumer spending. He expressed that the sustained strength of the economy leads him to question the current tightness of monetary policy. Kashkari indicated he anticipates one more rate increase this year, followed by another in 2027, underscoring the central bank’s commitment to bringing inflation back to target. He acknowledged that further rate hikes could pressure various economic sectors and that the ultimate peak for rates remains uncertain, emphasizing the Fed’s resolve to do what is necessary to tame prices.