https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/rss Speeches given by the president of the Federal Reserve Bank of Minneapolis. en {9DE5BC5A-01FE-4A32-A94D-3A7853D0D14A} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2026/conversation-with-neel-kashkari-at-the-2026-bloomberg-invest-conference <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation with Michael McKee, international economics and policy correspondent for Bloomberg Television and Radio at the 2026 Bloomberg Invest conference in New York City. </p> Tue, 03 Mar 2026 17:30:03 GMT {DE7358A0-F926-4AA7-9684-7D1DBAED9380} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2026/neel-kashkari-at-the-midwest-economic-outlook-summit Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation with Jim Ryan, chairman and CEO of Old National Bank, at the 2026 Midwest Economic Outlook Summit in Fargo, North Dakota. The summit is hosted by the Fargo Moorhead West Fargo Chamber of Commerce. Wed, 18 Feb 2026 21:23:08 GMT {FBDA214A-EB2A-4EE7-B4C3-DFE124B93D32} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2026/neel-kashkari-participates-in-2026-assa-session-lessons-from-bill-spriggs-contributions-to-economics-and-economic-policy <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a panel discussion honoring the economic policy contributions of Bill Spriggs, who served as an advisor to the Minneapolis Fed’s Opportunity & Inclusive Growth Institute. </p> <p>This panel is part of the 2026 Allied Social Science Associations (ASSA) annual meeting in Philadelphia, Pennsylvania, and is the product of a partnership between the Minneapolis Fed and the Labor and Employment Relations Association (LERA). The session moderator is Abigail Wozniak, director of the Opportunity & Inclusive Growth Institute. Other panelists include Lawrence Mishel, Economic Policy Institute; Robynn Cox, University of California, Riverside; William Rodgers III, Federal Reserve Bank of St. Louis; and Kasey Buckles, University of Notre Dame. </p> <p>More information on this panel and the additional sessions honoring Bill Spriggs at the 2026 ASSA annual meeting are <a href="/events/2025/sessions-honoring-bill-spriggs-contributions-to-policy-economics-and-the-economics-profession">available on the Minneapolis Fed’s website</a>.</p> Thu, 15 Jan 2026 21:28:09 GMT {D365B0CB-6B58-419C-9075-9EA47A366F83} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2026/neel-kashkari-participates-in-a-virtual-town-hall-with-the-wisconsin-bankers-association Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a virtual conversation with Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. Wed, 14 Jan 2026 19:57:13 GMT {F0D4B522-0E93-46E2-B4CA-C87E252940C5} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/qa-with-neel-kashkari-in-rapid-city-south-dakota <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a town hall in Rapid City, South Dakota, as part of a visit to learn about economic conditions in the region. The conversation is moderated by Tom Johnson, executive director for Elevate Rapid City. </p> Wed, 26 Nov 2025 14:05:15 GMT {B18C26A1-7779-4C97-AC66-76B2489D953F} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/qa-with-neel-kashkari-at-minnesota-womens-economic-roundtable-event <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation at a Minnesota Women’s Economic Roundtable event in Minneapolis. The conversation is moderated by Kate Kelly, former board member for the Minneapolis Fed and former CEO of Minnesota Bank & Trust. </p> Tue, 25 Nov 2025 23:19:09 GMT {DB2954EF-D418-4386-8541-1521303BF933} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-at-economic-club-of-minnesota Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, moderates a conversation with chairman and CEO of Ecolab, Christophe Beck, at the Economic Club of Minnesota in Golden Valley, Minnesota. Mon, 17 Nov 2025 17:28:28 GMT {4817FB96-79EF-4431-A757-19047030B6F5} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-michael-barr-economic-club-of-minnesota Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, moderates a conversation with Federal Reserve Governor Michael Barr at the Economic Club of Minnesota in Golden Valley, Minnesota. Thu, 09 Oct 2025 14:57:56 GMT {5D76B158-7B26-4E91-B28A-751E9EFB10D1} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-in-discussion-at-star-tribunes-north-star-summit-2025 Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation on artificial intelligence and the economy at the Star Tribune’s North Star Summit 2025 in Minneapolis. The conversation is moderated by Josh Boak of the Associated Press, and President Kashkari will be joined by Ronnie Chatterji, chief economist of OpenAI. Tue, 07 Oct 2025 15:21:03 GMT {7712061F-BB56-4CBF-AA31-3B9FA12EA3EB} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-at-la-crosse-area-chamber-of-commerce <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation at the La Crosse Area Chamber of Commerce in La Crosse, Wisconsin. The town hall is moderated by Samuel Bachmeier, community development specialist at La Crosse County.</p> Fri, 27 Jun 2025 12:08:05 GMT {7D0C37E0-0325-4B74-AA50-66A86A4D74C1} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/town-hall-with-neel-kashkari-at-keio-university-in-tokyo Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation and Q&A at Keio University in Tokyo. The session is moderated by Keisuke Otsu, professor at Keio University Faculty of Business and Commerce and honorary lecturer at the School of Economics, University of Kent. Fri, 27 Jun 2025 12:05:08 GMT {41DC7540-41D2-4782-B7BE-49F1C140E625} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-at-the-montana-chamber-of-commerce <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a town hall and Q&A at the Montana Chamber of Commerce in Helena, Montana. The conversation is moderated by Larry Simkins, former board member for the Minneapolis Fed and former CEO of The Washington Companies. </p> Thu, 26 Jun 2025 15:47:08 GMT {E9EA0BFE-9990-4846-9B03-6106A8D42904} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-remarks-at-the-bank-of-japans-institute-for-monetary-and-economic-studies-conference <section class="article-content"> <div id="article-header"> <h2>Conducting Monetary Policy in an Uncertain Economy</h2> <p>Thank you, Professor Hoshi, for that kind introduction. I would like to express my gratitude to Governor Ueda, the Bank of Japan, and the Institute for Monetary and Economic Studies for inviting me to participate in this important conference. I would also like to thank my fellow panelists for their insights and expertise. The comments I offer today are my own and do not necessarily reflect the views of others in the Federal Reserve System.</p> <p>The topic for today’s panel is “monetary policy challenges in an uncertain economy.” The global economy has been hit by an unusual number of large shocks in the past 20 years, presenting many challenges for policymakers: the 2008 global financial crisis, the COVID-19 pandemic, the high inflation that followed and now record trade policy uncertainty, to name a few. I will reflect on these four events and then draw lessons from them for policymakers navigating uncertainty.</p> <p>In each of these episodes, policymakers have faced at least two types of uncertainty: First, uncertainty about the shock itself, and second, implications of the shock for monetary policy. In the 2008 financial crisis, it took almost a year for the magnitude of the crisis to become clear to policymakers, who ultimately realized the U.S. financial system was essentially insolvent. Once the scale of the losses in the banking sector was understood, there was little doubt that massive fiscal and monetary support were necessary.</p> <p>Similarly, the onset of COVID-19 brought tremendous uncertainty: How contagious was the virus, how deadly, and how quickly would vaccines arrive? Once the seriousness of the pandemic and the implications of shutting down large sectors of the economy became clear, the necessary monetary policy response was also clear: massive support was needed both for the labor market and to keep inflation expectations anchored.</p> <p>When the economy reopened sooner than expected due to the arrival of effective vaccines, inflation began to accelerate, while the labor market was still indicating significant slack. For example, in the U.S., 12-month core inflation first crossed 2 percent in May 2021 when the unemployment rate was still 6 percent, well above the 3.5 percent level achieved just prior to the onset of the pandemic, a time when inflation was below target. Most forecasters and policymakers, including me, assumed that the increase in inflation would be transitory because there was slack in the labor market and, following years of inflation being at or below target, long-term inflation expectations remained firmly anchored. Thus, it would not require a significant monetary policy response. Indeed, if we had raised rates to fight a mild inflation shock that would have quickly subsided on its own, we would have needlessly harmed the real economy.</p> <p>Once we saw the magnitude and persistence of the inflation shock and considered the upward price pressure that Russia’s invasion of Ukraine would generate, we realized a strong monetary policy response was necessary in order to preserve anchored inflation expectations and to tamp down any excess demand. We didn’t have the luxury of allowing underlying transitory supply dynamics to play out on their own without a policy response.</p> <p>The most recent shock, driven by tariffs and trade policy uncertainty, is different from the prior ones. Understanding the shock itself is more straightforward: Officials are engaging in trade negotiations to try to rebalance global trade flows. A large increase in tariffs will increase inflation and decrease economic activity, at least in the short run. But given that monetary policy can either push both inflation and economic activity up or push them both down, tariffs present a special challenge for monetary policymakers. We have to pick one: fight inflation or support economic activity?</p> <p>At the Federal Reserve there is a healthy debate among policymakers about whether to “look through” the inflationary effects of the new tariffs. The look-through arguments view tariffs as creating a one-time change in the price level—a transitory inflation shock. This view prioritizes support for economic activity by lowering the policy rate while the economy transitions to its new equilibrium, at which point inflation will have returned to a 2 percent rate, albeit at a higher overall price level.</p> <p>Arguments against looking through tariff-induced inflation focus on the fact that the trade negotiations are unlikely to be resolved quickly. It may take months or years for negotiations to fully conclude, and there could be tit-for-tat tariff increases as trading partners respond to one other. In addition, some tariffs apply to intermediate goods, and it will take time for the full effects of those price increases to pass through to final prices. In the U.S., inflation has also been running well in excess of our 2 percent target for four years. How many years of elevated inflation can occur before long-run inflation expectations lose their anchor? These arguments support a stance of maintaining the policy rate, which is likely only modestly restrictive now, until there is more clarity on the path for tariffs and their impact on prices and economic activity. Personally, I find these arguments more compelling given the paramount importance I place on defending long-run inflation expectations.</p> <p>Turning to lessons from these episodes: Facing such large shocks and the uncertainties they create, policymakers must use judgment to analyze the shocks and determine the appropriate policy response. Policymakers’ collective judgments are of course imperfect, and when the proper policy response is unclear, moving more slowly can be warranted, even if it means, in hindsight, the response may be viewed as having been somewhat delayed. As my colleague Beth Hammack, president of the Cleveland Fed, recently <a href="https://www.clevelandfed.org/collections/speeches/2025/sp-20250416-approaching-monetary-policy-with-heart-brains-and-courage" target="_blank">said</a>, “I would rather be slow and move in the right direction than move quickly in the wrong direction.”</p> <p>During times of such heightened uncertainty, in the U.S. I often hear suggestions from some observers that policymakers should rely on policy rules, such as the Taylor rule, rather than judgment to guide our decisions. Simple policy rules are appealing for their apparent elegance and because they take imperfect human judgments out of the policy process, but they can lead to absurd recommendations when massive disruptions hit the economy. For example, when COVID-19 hit, the <a href="https://www.federalreserve.gov/monetarypolicy/2025-02-mpr-part2-accessible.htm#xbox6figa" target="_blank">Taylor (1993) rule</a> called for a federal funds rate of -8 percent, ignoring the very real constraint of the effective lower bound. The Taylor rule is silent on what to do when the policy rate hits zero.</p> <p>Today, while policymakers are debating whether to look through tariff inflation and cut the policy rate or to not look through tariff inflation and hold the policy rate, the Taylor rule, in contrast, will likely call for policymakers to <em>raise</em> the policy rate this year to combat inflation. It makes no distinction whether inflation is caused by excessive demand, disrupted supply or tariffs; all that matters is that inflation climbs faster than unemployment. If that condition is met, rates must go up. Looking through tariff inflation is simply not an option for strict policy rules.</p> <p>Massive shocks create uncertainty for policymakers, both in understanding the underlying dynamics of the shocks themselves and, for some shocks, in determining the appropriate policy response. In such moments, taking time to get more information to help inform the collective judgments of policymakers may be the best of an imperfect set of options.</p> </div> </section> Tue, 27 May 2025 03:01:51 GMT {493A4506-EF31-4C2F-B6D6-86A5CABA894D} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-at-minnesota-young-american-leaders-program Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation at the Minnesota Young American Leaders Program (MYALP) at the University of Minnesota. The discussion is moderated by Daniel Forbes, associate professor of Strategic Management and Entrepreneurship, Carlson School of Management, and academic co-director of the Center for Integrative Leadership, which hosts MYALP. Mon, 19 May 2025 15:51:57 GMT {4A276D2E-F35E-4C2A-989C-F7256B14D747} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-at-the-university-of-minnesotas-college-of-science-and-engineering Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a conversation at the University of Minnesota College of Science and Engineering, “Innovating the Future: Perspectives on Science, Engineering and the Economy,” in Minneapolis. The discussion is moderated by Andrew Alleyne, dean of the University of Minnesota College of Science and Engineering. Thu, 24 Apr 2025 17:39:50 GMT {BD2E5403-BB5B-4458-9E73-ECF93D57E4E3} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-qa-at-the-us-chamber-of-commerce-global-summit <p>Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, participates in a Q&A at the U.S. Chamber of Commerce Global Summit in Washington, D.C. The conversation is moderated by Steve Clemons, editor at large for The National Interest. </p> Tue, 22 Apr 2025 16:05:40 GMT {3C0067BF-FC1A-40C4-9E69-6FF899D6FFBB} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2025/neel-kashkari-at-detroit-lakes-chamber-economic-summit Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, will host a Fed Listens event and conversation at the Detroit Lakes Regional Chamber of Commerce Economic Summit in Detroit Lakes, Minnesota. The discussion will focus on labor market conditions, inflation, and how the Fed communicates and transmits monetary policy, and will be moderated by Jackie Buboltz, president of the Detroit Lakes Chamber. Fed Listens outreach events connect the Federal Reserve with citizens across America to support its 2025 review of monetary policy strategy, tools, and communications practices. Wed, 26 Mar 2025 14:15:25 GMT {7D1CACA7-E401-4FA9-AFF7-3ED924AFE7DD} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2024/neel-kashkari-participates-in-fireside-chat-at-torcuato-di-tella-university-argentina <p>Minneapolis Fed President Neel Kashkari participates in a fireside chat at Torcuato di Tella University, Buenos Aires, Argentina. The discussion is moderated by Gerardo della Paolera, former president of the university.</p> Mon, 17 Mar 2025 19:49:16 GMT {D1D4C1F9-AA14-456E-B1F0-AEFFBA13A746} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2024/neel-kashkari-participates-in-panel-discussion-at-the-central-bank-of-the-argentine-republics-2024-money-and-banking-conference <p>Minneapolis Fed President Neel Kashkari participates in a panel discussion at the Central Bank of the Argentine Republic’s Money and Banking Conference: Fiscal Deficits, Monetary Policy and Inflation, in Buenos Aires, Argentina. The panel is moderated by Santiago Bausili, governor of the Central Bank of the Argentine Republic. Pablo Hernández de Cos, former governor of the Bank of Spain, joins President Kashkari on the panel.</p> Mon, 17 Mar 2025 19:49:08 GMT {C5504A66-147C-46F7-B60C-4DCFD1CB93AF} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2024/president-kashkari-remarks-at-the-2024-money-and-banking-conference-hosted-by-the-central-bank-of-the-argentine-republic <h2>Introduction</h2> <p>Thank you, Governor Bausili. It is an honor to be here with you and Dr. Hernández de Cos from Spain. I have had the pleasure of meeting Governor Bausili a few times this past year when he visited the United States. This is my first visit to Argentina, and I am excited to see the country during this important time and also hope to have opportunities to visit again in the future.</p> <p>I am going to offer some remarks today about current and future monetary policy in the United States, but I will first briefly touch on some historical context that the audience here may find relevant as you work to bring inflation down in Argentina. Let me start by noting that the comments I offer today are my own views and do not necessarily reflect the views of others in the Federal Reserve System or of the Federal Open Market Committee (FOMC).</p> <h2>History of Some Important U.S. Economic Institutions</h2> <p>The United States Constitution was ratified in 1788, but it wasn’t until approximately 70 years later, in the 1860s, that the U.S. issued a national currency, the “greenback,” that we are all familiar with today. It was actually President Abraham Lincoln who introduced both the national currency and also federal government debt as mechanisms to finance the Union efforts to fight and win the U.S. Civil War. A saying in the U.S. is that necessity is the mother of invention, and that was certainly true for important economic institutions in the U.S.</p> <p>While the U.S. at that point had both a national currency and federal debt, it still didn’t have a central bank. It wasn’t until the U.S. economy was hammered by banking crises and economic depressions in the late 1800s and early 1900s, including the Panic of 1907, that political consensus finally emerged to establish a central bank, the Federal Reserve, in 1913.</p> <p>But a key consideration for politicians was ensuring the different regions of the U.S. were directly represented in the policy process. So, they designed a distributed structure, with the Federal Reserve Board located in Washington, D.C., and 12 independent Federal Reserve Banks spread out around the country. This is similar to the European Central Bank (ECB) today, which consists of the Executive Board located in Frankfurt and individual country banks, whose representatives sit on the Governing Council. I am sure Dr. Hernández de Cos will provide more details about the ECB in his remarks.</p> <p>The Minneapolis Fed, which I lead, represents the Ninth Federal Reserve District, which includes the northern central states of Minnesota, North and South Dakota, Montana, part of Michigan and part of Wisconsin. While each of the 12 Reserve Bank presidents represents our individual regions at the Federal Open Market Committee, we each make a recommendation for monetary policy that we believe is best for the United States as a whole.</p> <p>One of the most important assets of the Federal Reserve that enables us to be an effective central bank is our credibility with the public, including the American people, whom we are charged to serve, and investors around the world. They have learned that we will do our best to make policy decisions that help us achieve the goals the U.S. Congress has assigned us: stable prices and maximum employment. As I will discuss shortly, the U.S. (and international) experience provides a strong case for central banks to focus on pursuing price stability as a precondition for robust economic performance. Inflation is an unfair tax on incomes, it increases income inequality, and it undermines confidence. When citizens don’t have to worry about inflation, spending and investment decisions are less uncertain, and the financial sector is better able to channel savings to borrowers.</p> <p>Most importantly, our credibility is supported by the institutional independence of the Federal Reserve from the executive branch of the government. While we are ultimately accountable to the American people through their elected representatives, we are not making policy decisions to benefit any political party or any individual politicians. As I will explain in a moment, this credibility to focus on achieving our economic goals without consideration of politics did not always exist. It took a long time to build, and establishing it came at significant initial economic cost. But once established, this credibility has laid the foundation for economic prosperity for the last four decades in the United States.</p> <h2>Tackling High Inflation of the 1970s</h2> <p>In the 1960s, the U.S. enjoyed a period of low unemployment and generally low inflation. But in the 1970s, when oil prices skyrocketed around the world, the U.S. economy experienced a prolonged period of stagflation. Deep recessions resulted in the unemployment rate moving persistently higher while inflation climbed sixfold, from around 2 percent in the 1960s to almost 12 percent in the 1970s (Figure 1). In an attempt to mitigate output and job losses, the Federal Reserve did not aggressively increase interest rates, partly in response to political pressure from elected officials. The academic consensus agrees that, in doing so, the Fed contributed to a de-anchoring of inflation expectations and increased macroeconomic instability, ultimately undermining its own credibility and effectiveness.</p> <div id="chart1" class="publications-left publications-asset col-13">Loading figure 1...</div> <p>It wasn’t until President Carter appointed a new Federal Reserve Chair, Paul Volcker, in 1979 that the Federal Reserve turned its primary focus to fighting inflation. Chair Volcker aggressively restrained the growth in money supply, effectively raising rates to about 20 percent and triggering a severe economic contraction and high unemployment. These painful actions, however, paid off. By 1983, inflation had fallen to under 4 percent (Figure 2).</p> <div class="publications-left col-13"> <div class="highcharts-title" style="font-size: 20px; font-weight: 200; margin-right: 5px; margin-bottom: 5px; line-height:1.2; color: rgb(51,51,51);"> <div style="font-size: 16px; color: #fff; font-weight: 600; padding: 5px 8px; background-color: #888888; margin-right: 5px; margin-bottom: 5px; display: inline-block;">2</div> <br /> Volcker’s Disinflation</div> <div style="font-size: 12px; margin-left: 0px; margin-top: 0px; left: 10px; top: 7px; color: #666666; font-weight: 700; line-height: 1.2;">Fed Funds Rate, Inflation and Unemployment: 1960–1985</div> <div class="row"> <div id="chart2a" class="publications-asset col-md-6">Loading figure 2a...</div> <p> </p> <div id="chart2b" class="publications-asset col-md-6">Loading figure 2b...</div> </div> <div class="highcharts-caption small" style="font-size: 12px; line-height:1.2;"> Note: Inflation is headline PCE inflation, and the unemployment rate is for ages 16 and above. Gray bars indicate recessions.<br> Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Federal Reserve Board </div> </div> <p>Importantly, President Carter’s successor, President Reagan, who was from the opposing political party, reappointed Chair Volcker, thus endorsing Volcker’s approach to using monetary policy to keep inflation in check. This established a pattern of presidents reappointing Fed chairs who had been appointed by a president of the other party, which has now been repeated many times. This pattern has been instrumental in establishing political support for the Fed as an independent central bank, solely focused on economic goals rather than political ones.</p> <p>This independence does not mean the Fed never coordinates with the government. Indeed, in two major crises of the past 20 years, the Global Financial Crisis of 2008 and the COVID-19 crisis of 2020, the Federal Reserve worked closely with the U.S. Treasury Department to design crisis response policies to help reduce damage to the real economy from these shocks. In both cases, the Fed’s coordination with the government did not come at the expense of us trying to meet our inflation and employment goals; rather, coordination was done to help the Fed achieve those goals. Although the sources of those crises were very different, in both cases the U.S. economy faced a weakening economy, a large increase in unemployment and potential deflation. The Fed and the executive branch of government worked together to support the economy and reduce damage from the crises, thus supporting our monetary policy objectives.</p> <p>As Figure 3 shows, after the disinflation of the Volcker era, the early 1980s had a rapid decline in inflation, and then inflation was low and more stable for the next 30 years. We saw in the Global Financial Crisis of 2008 that inflation went very briefly negative, but it didn’t lead to a deflationary spiral. In fact, inflation was more or less stable at around our 2 percent target going into the COVID-19 pandemic.</p> <div id="chart3" class="publications-left publications-asset col-13">Loading figure 3...</div> <h2>The Post-COVID Inflation Surge</h2> <p>Of course, restoring jobs and successfully averting deflation was not the final chapter of the impact of COVID on the U.S. economy. The economy recovered quickly, and then the U.S., and most economies around the world, faced an enormous, unexpected increase in inflation, surprising my colleagues and me at the Federal Reserve and most economic forecasters.</p> <p>What caused the high inflation post-COVID? With the benefit of hindsight, the causes are now clear. First, global supply chains for goods were disrupted by the pandemic and took much longer to restore than we had expected. Second, with most of the services side of the economy closed due to COVID, spending was disproportionately directed at the goods sector, which was already facing disrupted supply. Many workers left the labor force due to business closures and were reluctant to return in part because of ongoing potential health risks. Significant fiscal and monetary stimulus had been directed at the economy in anticipation of an extended public health crisis. When highly effective vaccines became widely available much sooner than expected, the need for stimulus was reduced. And then Russia invaded Ukraine, sending a price shock through commodity markets globally. Each of these factors was likely at least somewhat inflationary on its own, but combined, they became highly inflationary for an extended period of time.</p> <p>What caused the fall in inflation? In response to this increase in the inflation, the Federal Reserve, and most central banks around the world, raised rates aggressively to bring inflation down. Historically, such a large increase in the policy rate had often led to recessions, like what happened in the early 1980s. But this time inflation fell while economic growth was sustained (see Figure 4).</p> <div class="publications-left col-13"> <div class="highcharts-title" style="font-size: 20px; font-weight: 200; margin-right: 5px; margin-bottom: 5px; line-height:1.2; color: rgb(51,51,51);"> <div style="font-size: 16px; color: #fff; font-weight: 600; padding: 5px 8px; background-color: #888888; margin-right: 5px; margin-bottom: 5px; display: inline-block;">4</div> <br /> Inflation, Unemployment and Fed Funds Rate: 2019–Present</div> <div class="row"> <div id="chart4a" class="publications-asset col-md-6">Loading figure 4a...</div> <p> </p> <div id="chart4b" class="publications-asset col-md-6">Loading figure 4b...</div> </div> <div class="highcharts-caption small" style="font-size: 12px; line-height:1.2;"> Note: Inflation is headline PCE. The unemployment rate is for ages 16-plus and has been truncated at 10 percent for visibility. Gray bar indicates recession.<br> Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Federal Reserve Board </div> </div> <p>How did this happen? While we are still in the final stages of bringing inflation down to our 2 percent target, it seems clear to me that substantial progress was made in unwinding many of the supply factors that led to an increase in inflation in the first place. Supply chains were eventually restored. The services economy reopened, taking pressure off the goods sector. Workers returned to the labor force and an increase in immigration to the U.S. led to more labor supply. The war in Ukraine, thus far, hasn’t intensified, and commodity markets have stabilized.</p> <p>What role did monetary policy play in bringing inflation down? Tight monetary policy likely reduced demand for goods and services somewhat, thus helping bring inflation down. But reflecting on the mistakes of the 1970s, the most important role monetary policy played was keeping long-run inflation expectations anchored and reinforcing the Federal Reserve’s credibility with the public that we would do what we needed to do to bring inflation down. That confidence was a key factor in achieving what has so far proven to be a remarkably strong labor market, even with rapid disinflation.</p> <p>Figure 5 provides evidence of this dynamic. It shows headline inflation (in blue) running at 2 percent or just below 2 percent going into COVID, and then experiencing the big run-up and subsequent fall that I just described. The green line is a market indicator of long-run inflation expectations. It’s what markets expect inflation to be for a five-year period, starting five years in the future. And you can see it barely moved during this period. This to me is a demonstration of what central bank credibility looks like, and it makes the FOMC more effective and our job easier. However, we have to do our part to maintain this credibility, and that’s what I believe we did by raising the policy rate rapidly in 2022.</p> <div id="chart5" class="publications-left publications-asset col-13">Loading figure 5...</div> <h2>What Is the Outlook for Monetary Policy in the U.S?</h2> <p>The Federal Reserve is committed to achieving our dual mandate goals of stable prices and maximum employment. Today, monetary policy remains in an overall restrictive stance, though just how restrictive is unclear to me. The labor market remains strong, and the most recent jobs report is encouraging that a rapid labor weakening does not appear to be imminent. Inflation has come down dramatically from its peak but remains somewhat above our target. As of right now, it appears likely that further modest reductions in our policy rate will be appropriate in the coming quarters to achieve both sides of our mandate. Ultimately, the path ahead for policy will be driven by the actual economic, inflation and labor market data.</p> <h2>Conclusion</h2> <p>I believe there are some key lessons from the U.S. experience that may be relevant to other economies around the world, including Argentina: First, low and stable inflation is a precondition for macroeconomic prosperity. Second, achieving low inflation may require short-term economic pain to both reduce inflation in the short run and to establish institutional credibility so the inflation remains low and in control over the long run. Finally, while the individual reforms will be specific to meet the needs of the individual economy, ultimately the specific institutional structures should be designed as much as possible to endure over a range of economic and political cycles.</p> Mon, 17 Mar 2025 19:48:59 GMT {69DFA0F6-EE4C-4CEB-BD28-DAF20A4BDE2F} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2023/neel-kashkari-qa-at-the-minnesota-transportation-conference-expo <p> A fireside chat with Minneapolis Fed President Neel Kashkari in Saint Paul, Minnesota, moderated by HDR’s Transportation Business Development Manager Jeff Rhoda. </p> Mon, 17 Mar 2025 19:48:30 GMT {265B0B59-2A23-45EA-8522-06CC790370B0} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2023/neel-kashkari-qa-with-the-minnesota-housing-partnership <p>A conversation with Minneapolis Fed President Neel Kashkari, moderated by Minnesota Housing Partnership’s Executive Director Anne Mavity at the Wilder Foundation in St. Paul, Minnesota. </p> Mon, 17 Mar 2025 19:48:25 GMT {2D620170-63F6-49E8-B200-355DE9096E37} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2023/neel-kashkari-qa-at-2023-siouxfalls-business-ceo-event <p> A conversation with Minneapolis Fed President Neel Kashkari, moderated by SiouxFalls.Business founder, Jodi Schwan. </p> Mon, 17 Mar 2025 19:48:13 GMT {165EDC8B-2112-4726-AA58-E1E5905B307F} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2023/neel-kashkari-qa-at-the-marquette-ceo-town-hall <p>A town hall with Minneapolis Fed President Neel Kashkari at Northern Michigan University in Marquette, Michigan, moderated InvestUp Michigan CEO Marty Fitante. </p> Mon, 17 Mar 2025 19:48:08 GMT {2956EAE1-F8F2-4B20-973B-130BCDFB794C} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2023/neel-kashkari-qa-with-the-boston-economic-club Mon, 17 Mar 2025 19:47:57 GMT {EFE90BF3-6824-4BC2-86E3-B44006117F29} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2023/town-hall-with-neel-kashkari-at-montana-state-university <p>A town hall with Minneapolis Fed President Neel Kashkari at Montana State University (MSU) in Bozeman, Montana, moderated by Dan Miller, dean of MSU’s Jake Jabs College of Business and Entrepreneurship. </p> Mon, 17 Mar 2025 19:47:52 GMT {3797D63B-C132-4048-9C82-A82B3292D80E} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2022/neel-kashkari-at-the-2022-northwoods-economic-development-summit Minneapolis Fed President Neel Kashkari participates in a Town Hall at the 2022 Northwoods Economic Development Summit at Nicolet College Theatre in Rhinelander, Wisconsin. Mon, 17 Mar 2025 19:47:30 GMT {5EFBD06B-0DE4-4D07-9666-B97B091C7A5C} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2022/neel-kashkari-fireside-chat-at-the-2022-conference-managing-cyberisk-from-the-c-suit <p>Minneapolis Fed President Neel Kashkari participates in a Q&A session, “Cyber Risk and Financial Stability,” at the Cleveland Fed’s Managing Cyber Risk from the C-Suite conference. The conversation is moderated by Jay Clayton, former chair of the U.S. Securities and Exchange Commission.</p> Mon, 17 Mar 2025 19:47:24 GMT {78F3F561-C44F-409A-9897-24A5F33A5360} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2022/neel-kashkari-fireside-chat-at-the-2022-journal-of-financial-regulation-conference <p>Minneapolis Fed President Neel Kashkari participates in a Q&A session at the 2022 <em>Journal of Financial Regulation</em> conference, “Financial Regulation: Between Policy and Politics,” at Columbia University, NYC. Moderated discussion hosted by Jeanna Smialek of the <em>New York Times</em>.</p> Mon, 17 Mar 2025 19:47:18 GMT {626F9B87-40DD-4E71-861B-CABB307224F5} https://sc103-mplsfed-prod-cd.mac-p-sitecore-ase-6.appserviceenvironment.net/speeches/2022/neel-kashkari-qa-at-lake-superior-state-university-sault-ste-marie-michigan <p>Minneapolis Fed President Neel Kashkari participates in a Q&A session at the eastern Upper Peninsula Spring Economics Luncheon in Sault Ste. Marie, Michigan.</p> Mon, 17 Mar 2025 19:47:14 GMT