Interest rates likely will need to be raised by the Federal Reserve again if the economy is strong, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Monday at an event held by the Wharton School at the University of Pennsylvania.
“If the economy is fundamentally much stronger than we realized, on the margin that would tell me rates probably have to go a little bit higher, and then be held higher for longer to cool things off,” Kashkari said.
Kashkari’s comments come almost a week after the Fed decided to keep interest rates steady for now. The agency hiked the rates to a 22-year high in July to try to keep inflation at bay.
The U.S. experienced a 3.8 percent unemployment rate in August, as well as a rise in consumer prices by 0.6 percent. This came after a rise in consumer prices by 3.7 percent over the past 12 months, according to consumer price index data.
Inflation has contributed to negative sentiments over President Biden’s handling of the economy and is an issue Republicans have used to go on the attack.
Georgia Gov. Brian Kemp (R) declared a state of emergency over the issue earlier this month. His order suspended gas and diesel taxes in the state.
“From runaway federal spending to policies that hamstring domestic energy production, all Bidenomics has done is take more money out of the pockets of the middle class,” Kemp said in a press release.
Former President Trump, the front-runner for the GOP presidential nomination, has lashed out at rising interest rates.
“Right now, interest rates are very high,” Trump said in an interview on “Meet the Press” earlier this month. “They’re too high. People can’t buy homes. They can’t do anything.”