NEW YORK — Minneapolis Federal Reserve President Neel Kashkari said Wednesday that inflation remains too high after the latest batch of economic data, signaling the central bank may not be done raising interest rates.
The Fed's preferred inflation measure, the personal consumption expenditures price index, rose 3.4% over the 12 months through August. Speaking at an event in New York, Kashkari said the data didn't change his view much — and that revisions showing stronger GDP growth and resilient consumer spending were the bigger surprise.
"I didn't think the inflation data today really changed that story for me very much," Kashkari said.
Earlier this month, Fed officials voted unanimously to raise the benchmark federal-funds rate by a quarter point to a range of 3.75% to 4%. In the Fed's September economic projections, Kashkari said he penciled in two rate hikes this year — one of which already happened — and a majority of officials forecast at least one more hike before year's end.
However, market expectations for another hike at the Fed's next meeting cooled after New York Fed President John Williams suggested Tuesday the central bank could wait until December. The probability of a hike next month stood at 38.2% Wednesday, according to CME's FedWatch tool.
Kashkari cautioned that his earlier projection was "a snapshot in time," saying the GDP revisions and consumer spending data "all needs to go into my real-time assessment of where we go from here."
- National Correspondent Network
