Kashkari: Slowing Job Market Won't Fuel Inflation; Rate Hike Ahead

WHO:

Bloomberg - Neel Kashkari, President of the Federal Reserve Bank of Minneapolis

CNBC - Neel Kashkari, President and Chief Executive Officer of the Federal Reserve Bank of Minneapolis

CNBC - President Donald Trump

WHAT:

Bloomberg - Neel Kashkari stated that inflation is being driven by supply dynamics and not the US labor market.

CNBC - Kashkari changed his outlook to expect one interest rate increase necessary this year.

CNBC - The headline inflation rate rose to 4.1%, the highest since April 2023.

CNBC - Core inflation was at 3.4%, marking a high since October 2023.

CNBC - Inflation has been above the Fed's 2% goal for five years.

CNBC - Kashkari mentioned that he had previously penciled in one rate cut by the end of the year but has now changed that to one rate hike.

WHERE:

Bloomberg - Aspen Ideas Festival, Aspen, Colorado

CNBC - Bloomberg Invest event, New York, US

WHEN:

CNBC - Kashkari's remarks were made during a panel discussion on a Friday.

CNBC - The Federal Open Market Committee voted to hold its benchmark rate steady just over a week prior to Kashkari's remarks.

WHY:

CNBC - Kashkari cited spiking inflation tied to fighting in the Middle East and other factors as reasons for the expected rate hike.

CNBC - Kashkari expressed skepticism that energy price-induced cost surges will abate soon due to ongoing unease in the Middle East.

CNBC - Kashkari indicated that inflation is driven by supply dynamics, including tariffs and disruptions in the Strait of Hormuz.

HOW:

CNBC - Kashkari described the inflation dynamics as being influenced by massive investments, specifically hundreds of billions of dollars a year into data centers and associated infrastructure.

(UPDATED June 26, 2026 23:21 UTC)

Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, recently stated that inflation is primarily driven by supply dynamics rather than the US labor market, highlighting concerns tied to ongoing conflicts in the Middle East. He adjusted his outlook to anticipate one interest rate increase this year, noting that the headline inflation rate has risen to 4.1%, the highest level since April 2023, while core inflation reached 3.4%, marking a peak not seen since October 2023. Kashkari emphasized that these inflationary pressures are linked to significant investments in infrastructure and disruptions in key supply routes, such as the Strait of Hormuz.