MNI BRIEF: Fed Must Hit 2% Before Rethinking Target-Kashkari

The Federal Reserve must hit 2% inflation before considering any adjustment to the inflation target, Minneapolis Fed President Neel Kashkari said Thursday.

"It is conceivable that once we get through this inflation period, and we get inflation back down to 2%, we could have a deliberation with, for example, elected leaders in Washington" and ask whether a Fed inflation target of 2.5%, 3% or 1.5% is preferable, he said in Q&A at an event in Michigan. "But we can't change it while we're missing it. Right?"

Kashkari characterized recent inflation as "pretty darn persistent" and said the Fed will "keep at it for an extended period of time." (See: MNI INTERVIEW: Sticky Prices Could Require More Hikes-Fed Econ)

"We have to get inflation back down to 2%. The Federal Open Market Committee is united in our commitment to doing that. Once we do that, it'll be an appropriate time to have that conversation," he said. "Just because the Committee picked 2% a decade ago that doesn't mean that we need to live with 2% for the next 50 years, but now's not the time to change."