iNDICA NEWS BUREAU

Indian American banker, economist and politician Neel Kashkari, president of the Minneapolis Federal Reserve, believes inflation, currently at a four-decade high in the United States, will slow down rapidly later this year.

“Inflation should start coming down this year,” Kashkari said at a virtual town hall with John Howard, CEO of United Natural Foods Inc. “My guess is, we are not going to be back to our 2% target (set by the U.S. Federal Reserve) by the end of this year. But we should be well on our way back toward that.”

The personal consumption expenditure price index was running at an annualized rate of 5.8 percent in Dec 2021 while consumer price inflation hit 7.5 percent last month, its highest level since 1982.

Kashkari, however, said most private forecasts expect inflation to fade to around an annual 3% rate by the end of 2022. “Just the math of that suggests inflation should start coming down over the course of the year,” he said.

Kashkari is among the more dovish Fed officials but is not a voting member of the interest-rate committee this year.

The Minneapolis Fed president agreed that a rapid “one-time boost” to prices is painful for families but said that is not the same thing as inflation raging year after year.

He, however, added that his outlook could change if supply-chain bottlenecks persisted or a fresh wave of Covid-19 struck. “We are going to watch the data over the next six months to see are we in fact headed in that direction,” he said.

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