TechFlow News, May 3: Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, stated that the Federal Reserve “may need to raise interest rates” under certain circumstances, as the war disrupts supply chains and exacerbates inflationary pressures.
Kashkari noted that the longer the conflict persists, the greater the inflationary pressure—even if hostilities end immediately, supply chain recovery could still take several months. He emphasized that the central challenge currently facing the Fed is the “high uncertainty surrounding the inflation path,” and thus policymakers must remain open-minded regarding the future trajectory of interest rates.
Additionally, he said he does not view the U.S. government’s debt level as an “imminent crisis.” He also expressed anticipation for future collaboration with Kevin Warsh, the nominee to the Federal Reserve Board, and indicated he would take seriously some of the concerns Warsh has raised.
