Kashkari: Hawkish On Inflation But Marginally Less So Elsewhere

Kashkari (’23 voter) says whilst headline inflation may have peaked there is no evidence that core or services inflation has done so. Further, the cost of not tackling inflation is unacceptable and whilst the transition that we’re going through might feel like stagflation he’s confident that can get through it fairly quickly with a robust economy on the other side. However, other remarks weren’t as outright hawkish:

• Households/consumers: Mortgage rates having a profound effect on homebuyers and gas prices have certainly affected purchasing power. Some evidence that consumer spending has softened but mixed signals make it hard to get a firm read on economy.
• Broad growth: Fed still trying to work hard for a soft landing, there’s a danger of talking ourselves into recession. Seeing signs of the global economy slowing.
• More hawkish on labor market: Seeing very little evidence of local labor softening, creating jobs at quite robust levels and pandemic still affecting marginal labor supply. But, wages are trying to catch up to, not drive inflation.