Kashkari Says Inflation Pressure Extends Beyond Energy
The Minneapolis Fed president pointed to services inflation after September’s rate increase, while distinguishing monetary policy from energy supply disruptions.
Key Takeaways
- Kashkari said US inflation remains too high even when food and energy are excluded.
- His September 20 comments followed the Fed’s quarter-point rate increase to 3.75%–4.00% on September 16.
Details
Minneapolis Federal Reserve President Neel Kashkari said on September 20 that inflation extends beyond energy, including across services, according to Reuters’ report of his Sunday interview.
Even after excluding food and energy, “inflation is still too high,” he told Fox News’ Sunday Morning Futures, Reuters reported. He said interest rates cannot reopen the Strait of Hormuz, while the Fed has tools to address broader price pressures.
The Federal Open Market Committee’s September 16 statement records a 12–0 vote to raise the federal funds target range by 25 basis points, or 0.25 percentage point, to 3.75%–4.00%. The committee described economic activity as solid and inflation as elevated, and linked the increase to bringing inflation back to its 2% goal.
Kashkari also described the economy as resilient and expressed hope that easing conflicts and improving productivity would help lower inflation, Reuters reported.
Market Analysis
Kashkari’s distinction explains why an energy supply shock can coexist with monetary tightening. Interest rates affect borrowing costs and spending throughout the economy; repairing a disrupted shipping route requires different tools. The Fed’s explanation of monetary policy also stresses that its effects on inflation and employment take time. For the September increase, the relevant test is therefore progress in broader price pressures over subsequent releases, rather than an immediate move in oil alone.
Sources
- Reuters: Kashkari interview report, September 20, 2026.
- Fox News: Sunday Morning Futures interview page, September 20, 2026.
- Federal Reserve: FOMC statement, September 16, 2026; monetary-policy explanation, updated July 19, 2024.
Note: This article is for news reporting purposes only and does not constitute investment advice.
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