Calling the latest inflation readings “very concerning,” Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday that the central bank is still committed to its goal of 2% inflation.
However, “We are a long way away” from that goal, he said in an interview on CBS News’ “Face the Nation.”
““We’re going to do everything we can to try to avoid a recession, but we are committed to bringing inflation down and we are going to do what we need to do.””
On Friday, inflation data released by the Bureau of Economic Analysis showed that higher gasoline prices led the personal-consumption-expenditures price index up 1% in June, exceeding forecasts of 0.9%. And June inflation measured by the PCE index showed the cost of living over the past year climbed 6.8%, the highest rate since January 1982.
Last Wednesday, the Fed ended its two-day policy meeting with another 75-basis-point rate hike in an effort to curb soaring inflation.
“We keep getting surprised,” Kashkari told host John Dickerson on Sunday, according to a transcript. Inflation is “higher than we expect. And it’s not just a few categories. It’s spreading out more broadly across the economy.”
Kashkari noted that wages are rising, but not as fast as inflation, “so we need to get the economy back into balance.”
When asked about whether the U.S. is in a recession, Kashkari said there were “mixed signals,” citing a “very strong” labor market, and said that whether there’s technically a recession or not, he’s focusing on inflation and jobs data.
“Wages continue to grow,” he said. “So far the labor market is very, very strong. And that means whether we are technically in a recession or not doesn’t change the fact that the Federal Reserve has its own work to do, and we are committed to doing it.”