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Kashkari flags lingering inflation risk and questions policy tightness

Minneapolis Fed President Neel Kashkari said he has penciled two rate increases in 2026.

Reported · Written up by our desk · Central Banks

Minneapolis Fed President Neel Kashkari said inflation is still too high, about 3%, and that new data does not change his outlook, speaking in a Q&A at the Council on Foreign Relations, according to FXStreet.

Kashkari added that the economy remains robust and households continue to spend, and he said the longer growth stays strong, the more he questions how tight monetary policy is.

He also said he expects another rate increase and that he has penciled two rate increases in 2026, a stance that implies continued sensitivity to inflation and economic strength in the Fed’s policy path.

The Fed sets US monetary policy through interest-rate adjustments, with inflation above its 2% target typically prompting higher rates and stronger demand for the US dollar, while inflation below target or weaker employment could lead to rate cuts that weigh on the Greenback, FXStreet noted.

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