- The speaker is uncertain about how much more the economy might need in terms of policy measures.
- They emphasize the importance of letting inflation and labor market data guide their decisions.
- The speaker acknowledges that previous forecasts have not been accurate.
- The goal is to bring inflation back down to 2% over time, but it is unclear how much action is needed to achieve this.
- The speaker mentions that if inflation remains around 2.5% or lower, it suggests disinflation is happening, but more data is needed to confirm this.
- If inflation starts to increase again, it indicates that more action is required.

Minneapolis Fed President Neel Kashkari says, “ultimately the economy will tell us how much is needed” to get inflation back to the 2% target. He speaks on “Bloomberg Surveillance.”
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You're kind of known as the guy who is the most hawkish.

I don't want to characterize you exactly now, given how things have changed over the last couple of months, but you have left open the possibility of doing more.

How much more would you think the economy might need?

Are we talking about just that 1 leftover move from the dot plot in September or if you have to start raising again do you have to go farther probably?

Well first of all it's great to see you thanks for having me.

People are looking for certainty and I wish I could give that certainty provided there has been so much, so much is unusual about the reopening of the economy and the dynamics that led to the high inflation and how long it has taken and the dynamics as the disinflation process has taken hold.

We have to let the inflation data guide us, the labor market data guide us.

Just to point out the obvious, our forecasts have not been great over the past couple of years.

And so we just need to, we're all committed, everybody on the FOMC is committed that 2% is our inflation target, we have to get inflation back down to 2% over a reasonable period of time, ultimately the economy will tell us how much is needed to get there.

Well, at what point do you think you would believe you have tightened enough or not tightened enough.

Well, I'll give you some good news is that Core PC on a three-month basis is running about 2.5 percent.

So that suggests that the disinflation is real.

If we continue to see inflation numbers of that range 2.5 percent or lower on a go-forward basis that would tell me okay we are now on a path back to 2% inflation.

But 3 months data is still only 3 months data.

And if we see that start to tick back up again, that would tell me our job is not yet done.


Speaker 0: You're kind of known as the guy who is the most hawkish. I don't want to characterize you exactly now, given how things have changed over the last couple of months, but you have left open the possibility of doing more. How much more would you think the economy might need? Are we talking about just that 1 leftover move from the dot plot in September or if you have to start raising again do you have to go farther probably?

Speaker 1: Well first of all it's great to see you thanks for having me. People are looking for certainty and I wish I could give that certainty provided there has been so much, so much is unusual about the reopening of the economy and the dynamics that led to the high inflation and how long it has taken and the dynamics as the disinflation process has taken hold. I wish I knew. We have to let the inflation data guide us, the labor market data guide us. Just to point out the obvious, our forecasts have not been great over the past couple of years.

And so we just need to, we're all committed, everybody on the FOMC is committed that 2% is our inflation target, we have to get inflation back down to 2% over a reasonable period of time, ultimately the economy will tell us how much is needed to get there. And I just don't know.

Speaker 0: Well, at what point do you think you would believe you have tightened enough or not tightened enough. What is it that you're looking for?

Speaker 1: Well, I'll give you some good news is that Core PC on a three-month basis is running about 2.5 percent. And it's lower than the six-month data. It's lower than the one-year data. So that suggests that the disinflation is real. If we continue to see inflation numbers of that range 2.5 percent or lower on a go-forward basis that would tell me okay we are now on a path back to 2% inflation.

But 3 months data is still only 3 months data. And if we see that start to tick back up again, that would tell me our job is not yet done.

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Fed Must Let Inflation, Labor Market Data Guide, Kashkari Says