Fed official 'confident' inflation in US will decline with tightening

By Ovunc Kutlu

ANKARA (AA) - President of US Federal Reserve Bank of Minneapolis Neel Kashkari said Monday he is confident that the record-high inflation in the country will decline with the central bank's monetary tightening.

"I am confident we are going to get inflation back down to our 2% target," Kashkari told CNBC’s Squawk Box business program in a live interview. "But, I am not yet confident on how much of that burden we are going to have to carry versus getting help from the supply side."

The Fed last week raised its benchmark interest rate by 50 basis points to tame inflation, while Chair Jerome Powell said more rate hikes are on the table.

Annual consumer inflation, or CPI, in the US rose 8.5% in March, marking the largest 12-month increase since December 1981. The CPI data for April will be released next Wednesday.

Kashkari said the Fed's policy tools "to tamp down inflation" will most directly impact those individuals with the lowest level of income.

"This is a difficult challenge I think for all of us, but we also know that letting inflation stay at these very high levels, it’s not good for anybody and it’s not good for the economy’s long-run for potential for anybody across the income distribution,," he explained.

The Minneapolis Fed president noted that some of the inflation data, based on different measures, has recently come in lower than expected.

Core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation indicator that excludes food and energy, rose 5.2% in March, slowing down from the previous month's annual gain of 5.3%.