Minneapolis Federal Reserve President Neel Kashkari said Thursday the need for more interest-rate increases to slow inflation boosts recession risks.
“We know we have more work to do in raising interest rates to bring inflation down,” and that task is urgent, Kashkari said in a question-and-answer session. “I don’t think we’re in a recession right now,” he said, adding that as interest rates climb “it should be tapping the brakes on the U.S. economy and that makes it more likely that we would end up in a recession.”
The typical definition of recession including two consecutive quarters of GDP decline often comes with job market weakness, and today "companies are continuing to hire hand over fist," he said. Kashkari also noted the supply of workers has been constrained by retirements, a shutdown of immigration flows and parents struggling with childcare. (See also: MNI INTERVIEW: US Labor Force 'Missing' 2.5M Workers - KC Fed)