Kashkari: Inflation Still Too High, Expects Fed to Raise Rates Again
nashnova research
Minneapolis Fed President Kashkari said he expects another rate hike, even as core PCE fell to 3% — calling inflation still too high. Upcoming payrolls and CPI data will determine whether the next move lands.
What exactly did Kashkari say?
Kashkari spoke on September 30 at a Council on Foreign Relations event in New York: he expects the Fed to raise rates again.
But the path, he stressed, "depends on economic performance." The September FOMC rate-hike projection was a snapshot based on that day's information — not a commitment.
This means → he gave a directional call, not a timetable. Markets cannot read "expects a hike" as "next meeting, for certain."
Inflation data improved — why is he still hawkish?
The August core PCE — personal consumption expenditures price index, stripping out food and energy, the Fed's preferred inflation gauge — came in at 3%, below economists' forecasts.
Kashkari was clear: "Inflation is still too high." The latest reading did not materially change his view.
In plain terms = the number is cooling, but it remains well above the Fed's 2% target. One good print is not enough; he wants a trend.
A "resilient" economy — good news or bad?
Consumer spending and GDP data released the same day showed the U.S. economy "has resilience," and Kashkari acknowledged it.
But "resilience" cuts both ways right now — the stronger the economy, the harder it is to bring inflation down.
This means → for markets, strong economic data may actually push rate-hike expectations higher, not lower.
Where does Kashkari stand versus other Fed officials?
The Fed just delivered its first rate hike in three years this month and signaled more could follow.
Kashkari's hawkish stance contrasts with officials who are open to skipping a hike in October.
This reflects a real split inside the Fed: doves want to "wait and see"; hawks like Kashkari say they cannot afford to pause.
What to watch next?
Two key data checkpoints ahead: the nonfarm payrolls report and September CPI.
If the job market stays hot and CPI fails to fall, hawks like Kashkari gain volume.
Put simply = the game now is "let the data decide" — the Fed has signaled a direction, but the numbers cast the final vote.
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