Kashkari says inflation is still too high as Fed's 4.1% forecast implies another hike
Minneapolis Fed President Neel Kashkari told Fox News on Sunday, September 20, 2026 that U.S. inflation remains too high even excluding food and energy, after the Fed's September projections put the median year-end funds rate at 4.1%.
On Wednesday, September 16, the Federal Reserve raised its funds-rate target to 3.75%-4.00%. The same meeting's projections put the median appropriate rate at 4.1% by the end of 2026, the midpoint of a 4.00%-4.25% range and a quarter point above the target just set. Minneapolis Fed President Neel Kashkari, a 2026 voter, said Sunday that inflation has spread through services, not just energy, and that the Fed has "tools to bring that back down."
Speaking on Fox News' "Sunday Morning Futures," he said: "The inflation that the American people are feeling every day is much beyond just oil prices. It's in all aspects of the economy. It's in the services sector, for example, widely." Even stripping out energy and food, "inflation is still too high." He was one of three officials who dissented at the July meeting in favor of a hike when the majority left rates unchanged. Last week the committee voted 12-0 for its first increase since 2023, and he supported it.
He did not say when another increase would follow. The projections that came with last week's hike, set out in Fed drops energy-shock inflation line, raises rates in unanimous vote, already show all but two policymakers seeing at least one more quarter-point increase in 2026.
On Friday, September 18, after that decision, the 2-year Treasury yield was 4.76% and the 10-year 5.01%.
Friday's curve rose with maturity, from 3.97% to 5.34%
Reuters reported that rate futures reflected a two-in-three chance the policy rate ends 2026 in 4.00%-4.25%, the range the median projection already occupies. The 7- to 10-year Treasury fund IEF, graded a B by etf.net in the Treasuries 3-10 year category under its published method, closed at $90.80, a dime from its 52-week low of $90.70.
The next FOMC meeting is October 27-28, the first date the extra quarter point in that median projection can be put to a vote.
Frequently asked
How high are rates now?
The Fed raised its funds-rate target to 3.75%-4.00%, its first increase since 2023.
What does the Fed's own forecast imply?
The median projection of 4.1% for year-end sits a quarter point above the target just set, and all but two policymakers see at least one more quarter-point increase this year.
When could another hike happen?
The next FOMC meeting is October 27-28, the first chance to vote on that extra quarter point.
Do markets agree?
Reuters reported rate futures put a two-in-three chance the policy rate ends the year in the 4.00%-4.25% range the median projection already occupies.