Neel Kashkari, president of the Federal Reserve's Minneapolis branch, took to Fox News's "Sunday Morning Futures" on Sunday to deliver the kind of news that lands somewhere between "water is wet" and "the check engine light is on again": inflation is "still too high."
"Even if we strip out energy, which is really volatile, and strip out food, they matter a lot, but in terms of where the economy is going, inflation is still too high," Kashkari told host Jackie DeAngelis. For those keeping score at home, that's the Fed's own preferred method of measuring inflation - removing the two things people actually buy - and it still came back with a frown.
He added, "The inflation that the American people are feeling every day is much beyond just oil prices. It's in all aspects of the economy." Which is a diplomatic way of saying: yes, everything costs more, and no, we don't have a magic wand.
By the numbers, annual inflation in August was 3.4 percent as measured by the consumer price index (CPI). Core inflation, which excludes volatile food and energy prices, was 2.4 percent last month. Inflation has now remained above the Fed's 2 percent target rate since March 2021, peaking at a 40-year high of 9.1 percent in June 2022. That's a long time to be above target - roughly the duration of a toddler's memory, but with worse tantrums.
The persistent inflation spurred the 12-member Federal Open Market Committee (FOMC) to raise its baseline interest rate target by a quarter point last week, to a range of 3.75 percent to 4 percent. The FOMC hadn't hiked rates since July 2023 and had cut rates at its final three meetings of last year. After the unanimous vote, Fed Chair Kevin Warsh said the rate hike "will support a timelier return" to the central bank's 2 percent target.
"I would be hard-pressed to describe broad financial conditions as restrictive," Warsh told reporters. "This view was widely shared by the committee, so we removed a dose of accommodation." Translation: we're still not squeezing hard enough to call it a squeeze, but we're easing off the gas pedal.
Welcome to The Hill's Business & Economy newsletter, I'm Julia Shapero - bringing you the latest on the intersection of Wall Street and Pennsylvania Avenue. Did someone forward you this newsletter? Subscribe here.
Key business and economic news with implications this week and beyond:
Treasury Secretary Scott Bessent said Monday he has "great confidence" in Federal Reserve Chair Kevin Warsh after the central bank raised interest rates by a quarter point against the wishes of President Trump. Because nothing says confidence like doing the opposite of what your boss wants.
Bessent also said Monday that officials from the U.S. and China are considering lowering tariffs on "noncritical" products, as President Trump prepares to host Chinese President Xi Jinping this week in Washington, D.C. Noncritical items - presumably not including the tariffs themselves.
Payments are set to be issued starting Monday in the $115 million class action lawsuit against tech company Oracle that "millions" could have qualified for. That's a lot of zeroes, and a rare instance of a tech giant paying out instead of cashing in.
Both parties are embracing the Supreme Court's summer ruling that allows parties to coordinate and spend unlimited amounts of money with campaigns as marquee midterm races head into the home stretch. Because nothing unites like the shared pursuit of unlimited cash.
Branch out with more stories from the day:
Senate Majority Whip John Barrasso (R-Wyo.) said Sunday that the GOP needs to "do more" to lower costs for Americans with the midterms roughly six weeks away. Six weeks: just enough time for a sincere conversion to fiscal populism.
Business and economic news we've flagged from other outlets:
President Trump's abrupt move to withdraw White House press credentials for three news organizations triggered a rare moment of unity among television networks, with several news media outlets announcing Monday they would not cover the president's daily activities while the ban on the trio remains. Read more.
Belarus's authoritarian leader Alexander Lukashenko said Monday that there are no available volumes of fertilizer to send to the U.S. This came after President Trump announced that he was working on a "massive Deal" to buy potash from Minsk at a steep discount amid the trade war with Canada. It's the geopolitical equivalent of showing up to a potluck with an empty Tupperware.
Opinions related to business and economic issues submitted to The Hill:
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