Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, a Federal Reserve official and a voting member of the Federal Open Market Committee (FOMC), said in an interview with CNBC that it is time to gradually raise interest rates.
Kashkari was one of three dissenters at the FOMC’s July meeting. He voted in favor of a 0.25 percentage point rate hike, while the majority decided to keep the target range at 3.5–3.75%.
According to Kashkari, corporate profits remain at elevated levels, consumers continue to spend, and the labor market is still showing resilience. He said he sees no evidence that the Fed’s current monetary policy is significantly restraining the economy. He prefers to start moving rates higher in small increments as new data becomes available to prevent inflation from becoming entrenched and avoid the need for much sharper rate hikes later.
Inflation has remained above the Fed’s 2% target for more than five years. Kashkari pointed to a series of supply shocks, including the conflict in the Middle East. Among the factors supporting persistent price pressures, he has previously highlighted large-scale investment in AI infrastructure and data centers, which continues to add demand to the economy.
For risk assets, including Bitcoin, signals like these from voting FOMC members traditionally increase uncertainty over the cost of money and liquidity. Markets are already pricing in the possibility of a rate hike at either the September or October meeting.