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.
St. Louis President James Bullard earlier today said the key rate needs to move to around 4.5%, and he told MNI’s FedSpeak podcast last month rates might need to be “higher for longer,” pushing back against market expectations for rate cuts next year.