Neel Kashkari, a nonvoting member this year on the Federal Reserve's rate-setting committee, says he supported the decision earlier this week to increase short-term interest rates by three-quarters of a percentage point.
And the president of the Federal Reserve Bank of Minneapolis said he could support a similar size rate hike — which is much larger than a typical increase as the Fed is moving aggressively to try to rein in high inflation — in July.
However, he wrote in an essay posted Friday morning, "this uncertainty about how much tightening will be needed leads me to be cautious about too much more front-loading."
After July, he said it may be more "prudent" to continue with half-percentage point rate increases until inflation starts coming down toward the Fed's 2% target.
That viewpoint seems to put Kashkari somewhat in line with others on the rate-setting committee. Fed Chair Jerome Powell said earlier this week that, while a 75 basis point increase would also be considered in July, he does not otherwise "expect moves of this size to be common."
Until last year, Kashkari was the most dovish, or resistant to raising rates, of the voices on the Fed's policymaking panel.
His forecasts show he's no longer as reluctant to higher rates. He expects rate policy to be more contractionary in the coming years than the median projections of other committee members.
But Kashkari and the rest of the committee expect rates will continue to increase into 2023 and then begin relaxing in 2024.
