Minneapolis Federal Reserve President Neel Kashkari said price pressures remain elevated after the latest batch of inflation data released Wednesday.
Kashkari's comments come after the Fed's preferred inflation measure, the personal consumption expenditures price index, rose by 3.4% over the past 12 months in August. Despite revisions to PCE lowering the year-over-year trend, economists project the central bank will largely stay committed to achieving price stability on a timely basis.
Speaking at an event in New York, Kashkari said the bigger surprise in this morning's data was the revisions to gross domestic product growth that suggested a resilient economy and consumer.
"I didn't think the inflation data today really changed that story for me very much," Kashkari said.
In the Fed's September Summary of Economic Projections, Kashkari said he penciled in two rate hikes this year, one of which already occurred at the Fed's meeting this month.
However, he said that was a snapshot in time based on the available data at that time.
"Including the GDP revisions that we've now seen, including the consumer spending data, all of this needs to go into my real-time assessment of where we go from here," Kashkari said.
Officials at the central bank voted unanimously to raise the benchmark federal-funds rate range by a quarter point to between 3.75% and 4% this month. A majority of officials forecast that the Fed will raise interest rates at least one more time this year.
However, market expectations for a rate hike next month decreased after New York Fed President John Williams suggested Tuesday that the central bank could wait until December before raising interest rates again. That probability currently stands at 38.2% Wednesday, according to CME's FedWatch tool.
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