© Reuters.
Investing.com – Minneapolis Federal Reserve Governor Neal said the strong January US labor market report suggests the need to keep raising interest rates, writes Bloomberg.
“My rate forecast is still around 5.4%,” Kashkari said on Tuesday, referring to how high the rate needs to be to curb inflation.
Last week, the Fed raised the base by a quarter of a percentage point to a range of 4.5% to 4.75%. The rate was raised by half a point in December and 4 times by 75 basis points before.
Fed officials predicted they would raise the rate to 5.1% in 2023 and keep it there until the end of this year.
Qashkari, who sits on the Federal Open Market Committee this year, has shown himself to be one of the more hawkish officials in recent months.
“I was surprised by the large number of jobs. This tells me that so far we are not seeing much of an effect from tightening our labor market policies,” he said. – There is some evidence that it has some effect, but so far it is rather muted. I haven’t seen anything yet that could lower the rate.”
Kashkari noted a decrease in inflation for goods, especially food, which he sees as a good sign, but so far the labor market has made it difficult to cut the rate.
— Materials from Bloomberg were used in the preparation
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