Up to two years for US CPI to return to target - Kashkari

June 20, 2024 10:45 AM EDT - It could take up to two years to get U.S. inflation back to the Federal Reserve’s medium-term target, according to Minneapolis Federal Reserve President Neel Kashkari.

Kashkari, talking at the annual Michigan Bankers Association Convention earlier Thursday, said wage growth was too high to bring inflation back to the 2% target right now.

He added that it will probably take a year or two to get inflation back to target.

Data released earlier this month showed that the U.S. Consumer Price Index advanced 3.3% on an annual basis in May, after increasing 3.4% in April.

On a monthly basis, the CPI was unchanged in May, following a 0.3% increase in April, helped by cheaper gasoline.

Kashkari said on Sunday, in an interview with CBS' "Face the Nation" program, that the U.S. central bank will cut interest rates once this year, waiting until December to do it.

"It's really going to depend on the data, and we're in a very good position right now to take our time, get more inflation data, get more data on the economy, on the labor market, before we have to make any decisions," he said.

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