Minneapolis Fed’s Kashkari Advocates Gradual Rate Hikes to Combat Inflation

• Minneapolis Fed’s Kashkari advocates gradual rate hikes starting September.
• He was a dissenter for a quarter percentage point hike at the last FOMC meeting.
• Goal is to curb inflation, not dramatically slow the economy.

Minneapolis Federal Reserve President Neel Kashkari stated on Wednesday that the U.S. central bank should begin incrementally raising interest rates to curb high inflation and preempt the need for more aggressive actions later. He suggested a gradual approach could commence as early as September. Kashkari was one of three dissenters at the recent Federal Open Market Committee meeting, where he favored a quarter percentage point rate hike while the majority voted to maintain the benchmark funds rate between 3.5%-3.75%. He clarified that his objective is to bring down inflation, which he largely attributes to supply shocks, rather than to dramatically slow the economy, emphasizing that he is not advocating for sharp rate increases.