(More comments from Kashgar will be added)
January 28 () – At a time when inflation is higher than expected and lasting longer, the Federal Reserve needs to remove a “slight” leg from the monetary accelerator pedal to offset the imbalance between supply and demand, Minneapolis Fed President Neil Kashkari said Friday. .
“The way we balance this is that we are trying to strengthen monetary policy by raising interest rates,” Kashkari told NPR News in its first public comment since the Fed convened earlier this week and will begin raising rates in March.
“It doesn’t brake the economy, but it frees our feet a bit from the gas counter,” he said, and “we don’t know” how much it should go up.
He blamed much of the pressure of rising prices on a pandemic that cluttered supply chains and alienated workers from the workforce.
“Many of the reasons for the high prices right now are temporary factors related to COVID,” Kashgari said. “Hopefully, when supply chains are self-selected, some of the price pressure will naturally ease themselves. And that means the Federal Reserve should work less.
Asked how much the interest rate should be raised, Kashgar pointed to the Fed’s policy forecasts for December, indicating that the rate would rise three times in 2022.
“We need to see how the data emerges,” he said. “We just don’t know – it depends on what happens to the supply chains, what happens to the workers.” (Ann Saphir reports)