MNI BRIEF: Kashkari-Further Fed Hiking Possible, Cuts Far Off

Minneapolis Federal Reserve President Neel Kashkari said Tuesday he cannot rule out the need for additional monetary tightening to fight persistently high inflation, adding that it's too soon to discuss the timing of eventual rate cuts.

“Are we done raising rates? I’m not ready to say that we’re done, but we’re seeing positive signs,” he said during a panel talk. “We’re a long way away from cutting rates” with some measures of price gains still around 4%, he said.

Recent inflation reports have been "positive" but Kashkari wants "convincing evidence” price gains are well on their way back to 2%. Officials must avoid a 1970s type of cycle where inflation flares up and forces the Fed to chase it, which back then triggered a deep recession, he said. The U.S. economy today appears strong and there's no evidence a recession is coming, though the Fed must be mindful of the lagged effect of its tightening, Kashkari said. (MNI INTERVIEW: Odds of Soft Landing Improved - Fed's Kliesen)