Fed's Kashkari Prioritizes Inflation Fight, Calls Labor Market 'Pretty Good'

Minneapolis Federal Reserve President Neel Kashkari said on May 28, 2026, that cooling inflation remains his top priority, warning consumer prices are still "way too high" while the U.S. labor market is in "pretty good shape." Speaking at a Bank of Japan conference, Kashkari emphasized that inflation has overshot the Fed's 2% target for five straight years. He cited April's consumer price index, which rose 3.8% year-over-year, with the core measure up 2.8%. A prolonged inflation overshoot could unanchor expectations and force more aggressive rate action, he warned. Kashkari identified energy and fertilizer costs as the primary current inflation drivers and said he is monitoring for broader pass-through into the economy. On artificial intelligence, he said it is too early to determine whether productivity gains could allow higher interest rates. He also voiced support for reviewing the Fed's dot plot projections and forward guidance under the new chair.