Star Journal

Top Menu

  • Contact Us
  • Hodag Star Journal E-Edition
  • Subscribe

Main Menu

  • Local
    • News
    • Business
    • Schools
    • Law & Order
    • Arts & Ent
    • Wedding Planner
    • Viewpoint
    • Sports
      • Sports News
      • High School Sports Scores
  • Covid 19
  • Outdoors
  • Wellness
  • Classifieds
    • View Ads
    • Place Ads
  • Our Legals
    • Legal Ads
    • Statewide
  • Obits
  • Lake View
  • Northwoods NOW
  • Living On The Lake
  • Contact Us
  • Hodag Star Journal E-Edition
  • Subscribe

logo

Star Journal

  • Local
    • News
    • Business
    • Schools
    • Law & Order
    • Arts & Ent
    • Wedding Planner
    • Viewpoint
    • Sports
      • Sports News
      • High School Sports Scores
  • Covid 19
  • Outdoors
  • Wellness
  • Classifieds
    • View Ads
    • Place Ads
  • Our Legals
    • Legal Ads
    • Statewide
  • Obits
  • Lake View
  • Northwoods NOW
  • Living On The Lake
BusinessFeaturedNews
Home›Local›Business›District Federal Reserve chair talks inflation, interest rates at local summit

District Federal Reserve chair talks inflation, interest rates at local summit

By StarJournal
October 17, 2022
0
0
Share:

The Northwoods Economic Development Summit was held recently at Nicolet College.

By Eileen Persike, Editor

RHINELANDER – Inflation, interest rates and the economy in general have become topics of conversation throughout the country lately.  A group of Northwoods business people and residents had the opportunity to discuss those subjects with a monetary policy professional last week. Neel Kashkari, Ninth District Federal Reserve Bank President and CEO was the featured speaker at the Northwoods Economic Development Summit held at Nicolet College.

Ninth District Federal Reserve Bank President and CEO Neel Kashkari

At a town hall meeting Kashkari explained that one of the main jobs of the Federal Reserve is to know what is happening with wages and business in the region, which includes Minnesota, Montana, North and South Dakota, the Upper Peninsula of Michigan and northwestern Wisconsin. Every six weeks he goes to Washington DC and as a group the Federal Reserve sets interest rates for the nation.

“We have two goals, one of which is stable prices – 2% inflation,” Kashkari said. “The other goal is maximum employment, get as many Americans as possible employed and contributing to our economy.”

The current annual U.S. inflation rate is 8.2%. Raising the benchmark interest rate is what the Federal Reserve has been using to bring that number down.

He talked about rising interest rates and the “tremendous uncertainty in the underlying fundamentals in the economy.” At the beginning of the year, Kashkari said, negative GDP growth led some to believe the country was in a recession. At the same time, the job market was creating strong job growth.

“Are we in a recession or is the economy still growing? There were mixed signals,” Kashkari said. “So by moving at an aggressive but not overwhelming pace, it allows us to get the fund rate up to signal our commitment to keeping inflation in check and bringing it back down to 2%, but it also gives us some time to see how the economy is unfolding.”

An audience member asked why the Fed doesn’t “pull off the band-aid” and increase interest rates at a quicker pace than it has been.

“If we keep raising rates or we just went up 2% or 3% or 4% in one shot, it may well be that that’s too much and we end up overdoing it needlessly,” said Kashkari. “So by moving and looking at the data and seeing how the economy is responding it allows us to try to measure the dosage somewhat while still moving aggressively.”

One factor to consider is the fear of inflation, Kashkari said, adding the Fed is using what it learned from the last big inflation cycle in the 1970s to control that dynamic.

“That, in part, is why we’re acting as aggressively as we are to tell the world we’re dead serious about getting inflation down – because we do not want that psychology to take hold.”

He did note that surveys of families and individuals and the financial markets indicate the belief that inflation is headed back down fairly quickly.

“Which is good news,” said Kashkari. “But now we have to deliver what we said we’re going to do to validate those expectations so they don’t get out of control.”

The Federal Reserve officials will meet the beginning of November to discuss the economy. It has raised the interest rate by three percentage points so far this year and Kashkari said he expects increases to continue.

“A … likely scenario is we will raise to some level north of 4%, maybe 4.5, and then pause and sit there for an extended period of time while the tightening that we’ve already done works its way through the economy,” said Kashkari.

TagsNorthwoods Economic Development Summit
Previous Article

Rhinelander High School Students of the Month

Next Article

Check it Out: Rhinelander District Library – ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0

Related articles More from author

  • Business

    Letting go is key

    February 5, 2015
    By StarJournal
  • Latest NewsLocalNews

    The Seed Library

    April 27, 2015
    By StarJournal
  • LocalMultimediaNewsPhoto GallerySchools

    Crescent school unplugs for Earth Day

    April 27, 2015
    By StarJournal
  • BusinessUncategorized

    Business Close-Up: Getting damaged vehicles running

    November 14, 2013
    By StarJournal
  • News

    Veterans? Benefits Expo scheduled for Sept. 14

    August 30, 2013
    By StarJournal
  • News

    County board discusses NR 115 and zoning plan

    August 23, 2013
    By StarJournal

Leave a reply Cancel reply

You must be logged in to post a comment.

About Us


Star Journal is published by Multi Media Channels LLC, N2919 County Road QQ Waupaca, WI 54981.

  • Contact Us
  • Hodag Star Journal E-Edition
  • Subscribe
Copyright © 2020 Multi Media Channels LLC.
All Rights Reserved. No part of this publication or any of its contents may be reproduced, copied, modified or adapted without the prior written consent of Multi Media Channels LLC.
×