Past efforts to bring down inflation have ended up tipping the economy into recession and it is still unclear if the Federal Reserve can avoid that outcome in this cycle, said Minneapolis Fed President Neel Kashkari on Thursday. “So the question right now is, can we bring inflation down without triggering a recession? And my answer to that question is: I don’t know,” Kashkari said, during a talk with business leaders in Minneapolis.
He said he didn’t think the economy was in a recession right now. It is clear the Fed “has more work to do in raising interest rates to bring inflation down,” he added. The labor market remains very strong, wages are rising and so are a lot of other fundamentals. This means the Fed could probably do more, Kashkari noted. Earlier Thursday, St. Louis Fed President James Bullard told the Wall Street Journal he is leaning toward supporting a 0.75 percentage point rate hike in September. This would be the third consecutive unusually large interest rate hike by the Fed and would bring its Fed’s benchmark rate up to 3%-3.35%. Some other Fed officials have said they …