Federal Reserve Bank of Minneapolis President Neel Kashkari said on Friday that he sees the Federal Funds target range rising to 1.75-2.0% by the year's end and that he sees the neutral rate of interest at 2.0%, reported Reuters. If inflation is enduring, the Fed will need to get modestly above neutral while inflationary dynamics unwind, he continued, adding that the Fed will need to act more aggressively if the economy turns out to be in a high-pressure, high inflation equilibrium. Kashkari said that over the course of the year as the Fed moves rates to neutral, we will get more information to determine how much further rates need to rise.
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