Contradicting the Biden administration’s dubious claims regarding the economy, Neel Kashkari, president of the Minneapolis Federal Reserve, doubted the Fed could rein in inflation and begin lowering interest rates by 2023.
The dousing of cold water on the administration’s narrative occurred Sunday during CBS News’ “Face the Nation.”
The Biden administration found some cover in a recent New York Times post that noted “bond pricing implies that following consecutive interest rate hikes of 0.75% in June and July — the largest two month-increase in thirty years — investors expect the Federal Reserve to get inflation under control and begin lowering interest rates sometime next year.”
However, Kashkari disagrees, saying that such speculation is premature, noting that “investors’ predictions for near-term rate decreases is misguided since inflation is stubbornly persisting.”
Kashkari continued: “We are committed to bringing inflation down and we’re going to do what we need to do. And we’re a long way away from achieving an economy that is back at 2% inflation and that’s where we need to get to.”
Kashkari has been critical of President Biden’s handling of the economy, and his administration’s reckless statements and assumptions, telling the New York Times he doesn’t “know what the bond market is looking at” to determine that rates would come down in 2023. He added the bar would [need to] be “very, very high” to lower rates.
Kashkari clarified: “This is in part due to the fact that interest rates will likely have to come up considerably more to adequately tackle inflation.”
Kashkari cited E.J. Antoni, a research fellow for regional economics at the Heritage Foundation.
Antoni noted in his report, published by The Daily Caller, that “the last time inflation was this high, the federal funds rate was over 13%.” He added, that this is a “marked contrast from the [current rate of] 2.25% to 2.50%.”
The Fed attempted to curb inflation last week by introducing a modest interest rate hike. However, Kashkari does not believe the move will positively impact the economy.
“It’s very concerning, you know,” said Kashkari. “We keep getting inflation readings, new data that comes in, and as recently as this past week, and we keep getting surprised. It’s higher than we expect. And it’s not just a few categories.”
Kashkari continued. “It’s spreading out more broadly across the economy. And that’s why the Federal Reserve is acting with such urgency to get it under control and bring it back down.”
Scroll down to leave a comment and share your thoughts.
