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MNI BRIEF: Kashkari Says Fed Needs Sustained Tighter Policy

(MNI) OTTAWA
(MNI)

The Federal Reserve needs to keep hiking interest rates and then make sure to hold them at restrictive levels for a while to make sure inflation is clearly coming back to target, Minneapolis President Neel Kashkari said Tuesday in comments that line up closely with other FOMC members.

There is a danger of relaxing policy early in response to limited signs of a slowing economy and prices, Kashkari said at a Wall Street Journal online talk. He didn't lay out a specific view of the pace of hikes over the next few meetings. “We need to get policy to a stance where we’re clearly tightening the economy, and then we need to be patient and allow inflation to come back down towards our 2% target,” he said. Inflation still appears to be sticky and “we have more work to do,” Kashkari said.

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The Federal Reserve needs to keep hiking interest rates and then make sure to hold them at restrictive levels for a while to make sure inflation is clearly coming back to target, Minneapolis President Neel Kashkari said Tuesday in comments that line up closely with other FOMC members.

There is a danger of relaxing policy early in response to limited signs of a slowing economy and prices, Kashkari said at a Wall Street Journal online talk. He didn't lay out a specific view of the pace of hikes over the next few meetings. “We need to get policy to a stance where we’re clearly tightening the economy, and then we need to be patient and allow inflation to come back down towards our 2% target,” he said. Inflation still appears to be sticky and “we have more work to do,” Kashkari said.

Keep reading...Show less