The 2026 FOMC voting committee and Minneapolis Federal Reserve Chairman Kashkari said in an interview on Wednesday that the Federal Reserve should now “begin to gradually raise” interest rates to reduce inflation and avoid the need for larger interest rate hikes in the future. Kashkari was one of the three voting commissioners supporting a 25 basis point rate hike at last week's FOMC meeting. He said that at present, corporate profits are strong, consumers and the job market are resilient, and there is no evidence that monetary policy is clearly restrictive, so it is time to start gradually raising interest rates. He stressed that this is not an idea of a sharp increase in interest rates, but rather hopes to “act in small steps” to avoid being forced to aggressively tighten policies after future inflation becomes entrenched. He added that it is uncertain what action the FOMC will take in September, and future data will play a key role. Meanwhile, Kashkari said that Federal Reserve Chairman Walsh did not pressure him and once told him, “Do what you think is right for the economy.”

The 2026 FOMC voting committee and Minneapolis Federal Reserve Chairman Kashkari said in an interview on Wednesday that the Federal Reserve should now “begin to gradually raise” interest rates to reduce inflation and avoid the need for larger interest rate hikes in the future. Kashkari was one of the three voting commissioners supporting a 25 basis point rate hike at last week's FOMC meeting. He said that at present, corporate profits are strong, consumers and the job market are resilient, and there is no evidence that monetary policy is clearly restrictive, so it is time to start gradually raising interest rates. He stressed that this is not an idea of a sharp increase in interest rates, but rather hopes to “act in small steps” to avoid being forced to aggressively tighten policies after future inflation becomes entrenched. He added that it is uncertain what action the FOMC will take in September, and future data will play a key role. Meanwhile, Kashkari said that Federal Reserve Chairman Walsh did not pressure him and once told him, “Do what you think is right for the economy.”