Minneapolis Fed Chairman Neel Kashkari: "Recession Risk in the USA"

Minneapolis Fed President Neel Kashkari stated that the US Federal Reserve (FED) will enter the recession process as a result of the failure to structure the problems in the supply chain.

Minneapolis Fed President Neel Kashkari underlined that the Fed will face the risk of recession if the problems in the supply chain do not improve, in his assessment held at the University of Minnesota last Friday. Continuing his statements, Chairman Kashkari added that if the breaks in the supply chain are not corrected, the Fed will have to implement a more aggressive monetary policy to curb high inflation. He stated that even if aggressive monetary policy is implemented, they will experience a higher unemployment rate. Kashkari explained that this situation may also cause a recession. The US Federal Reserve announced in May that they had increased interest rates by 50 basis points. This was recorded as the highest rate increase since the millennium. In the text of the Fed decision, he stated, “We are very careful about inflation risks.” Speaking at the press conference held after the interest rate decision, Fed Chairman Jerome Powell stated that they were not actively considering a 75 basis point rate hike.