Kashkari Warns U.S. Inflation Spreads Beyond Oil

Minneapolis Federal Reserve President Neel Kashkari said U.S. inflation remains too high across the economy and is not limited to oil or other energy prices, with services and many other sectors continuing to post significant increases. He supported the Fed’s unanimous decision to raise its benchmark interest rate by a quarter percentage point to a range of 3.75% to 4%, the first increase since 2023, and said policymakers must return inflation to their 2% target. Kashkari acknowledged that interest-rate policy cannot reopen the Strait of Hormuz or directly reduce oil prices, but argued that the Fed can prevent energy-related pressures from becoming entrenched throughout the economy. He said the economy and labor market remain resilient, while policymakers’ projections indicate at least one more rate increase could be possible before year-end.