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MNI BRIEF: Fed Must Keep Hiking After New CPI Report-Kashkari

(MNI) Ottawa

Inflation likely to remain above 2% for a long time, Minneapolis Fed president says.

The Federal Reserve needs to keep pressing ahead with rate hikes after a report Wednesday showing inflation was slower than investors expected because price gains are likely to remain above 2% for a long time, Minneapolis President Neel Kashkari said.

“I was certainly happier to see inflation surprise to the downside” after a series of upside surprises, Kashkari said during a talk at the Aspen Economic Strategy Group. “It doesn’t change my path” laid out in June calling for a policy rate of 3.9% at the end of this year and 4.4% at the end of next year, he said. That remains true even with a recession being possible in the near term, he said.

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The Federal Reserve needs to keep pressing ahead with rate hikes after a report Wednesday showing inflation was slower than investors expected because price gains are likely to remain above 2% for a long time, Minneapolis President Neel Kashkari said.

“I was certainly happier to see inflation surprise to the downside” after a series of upside surprises, Kashkari said during a talk at the Aspen Economic Strategy Group. “It doesn’t change my path” laid out in June calling for a policy rate of 3.9% at the end of this year and 4.4% at the end of next year, he said. That remains true even with a recession being possible in the near term, he said.

Keep reading...Show less