Fed's Kashkari says US inflation 'too high across the economy,' not just an oil problem

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Sunday (local time) that US inflation is running far too high across the broader economy — not simply because of rising oil prices.

Speaking on Fox News that morning, Kashkari said that even stripping out volatile energy and food prices — which he acknowledged still matter — inflation remains too elevated to gauge where the economy is headed.

"The inflation that Americans are feeling in their daily lives is not just an oil problem — it is showing up across the economy," he said, adding that broad price pressures were also evident throughout the services sector.

"We have the policy tools to bring it down," he said.

Kashkari said the Federal Reserve's mandate is to return inflation to its 2 percent target. He acknowledged that adjusting interest rates cannot reopen the Strait of Hormuz or directly push down global oil prices, but said monetary policy can help ease broader price pressures across the economy.

He added that he hoped "other parts of the government and other parts of the real economy" would also lend some assistance.

Kashkari backed last week's unanimous Federal Reserve decision to raise the benchmark interest rate by 25 basis points.

He was one of three policymakers who had dissented at the July Federal Open Market Committee meeting, voting for a rate hike when the Fed opted to hold. He is widely regarded as one of the Fed's most prominent hawks.