Fed’s Kashkari says inflation is still too high across US economy

Minneapolis Fed President Neel Kashkari told Fox News on Sunday that price pressures reach well beyond energy, according to Business Recorder. He said inflation would still be elevated even after stripping out volatile energy and food costs, which he called significant. Measured by the broader direction of the economy, he argued, inflation remains above the level the central bank wants.

Kashkari backed last week's unanimous decision to raise the policy rate by a quarter percentage point, to a range of 3.75% to 4.00%. He added that the Fed's job is to return inflation to its 2% target, and that interest rates cannot reopen the Strait of Hormuz or lower crude prices. Oil prices had surged after US and Iranian forces sank tankers in the strait and Saudi Arabia halted its East-West pipeline following aerial attacks.

His comments mirrored those of Fed Chairman Kevin Warsh, who after Wednesday's rate meeting estimated that August inflation on the Fed's preferred gauge was about 3.6%. That official figure is not due until later this month. Warsh also pointed to many categories still rising more than 3% over both six and twelve months.