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Neel Kashkari, president of the Federal Reserve Bank of Minneapolis in the U.S., speaks at the Milken Institute Global Conference hosted by the U.S. private think tank Milken Institute at The Beverly Hilton in Beverly Hills, California, on May 7, 2024 (local time). / Reuters, Yonhap

CNN reported on the 23rd (local time) that Neel Kashkari, president of the Federal Reserve Bank of Minneapolis in the U.S. and a prominent hawk within the Federal Reserve (Fed), assessed that reaching the Fed's 2% inflation target could prove difficult until the war with Iran ends.

Appearing on CBS News's "Face the Nation" that day, President Kashkari stated, "The longer the war with Iran drags on, the less confident I feel that inflation will return to our target."

President Kashkari emphasized, "The Fed remains firmly committed to bringing inflation down to the 2% level," adding, "However, if the situation continues to deteriorate, we will have no choice but to take stronger action."

Noting that the U.S. national debt recently surpassed 40 trillion U.S. dollars, he explained, "The 10-year Treasury yield has climbed to 4.7%, which is elevated compared to recent history," and that "in the long term, economic growth, productivity, and the structure of government borrowing will determine interest rates."

Since the U.S. and Israel struck Iran on February 28, international crude oil prices have surged, leading U.S. consumers to feel the pinch of rising prices directly at the gas pump. A sharp reduction in oil tanker transit through the Strait of Hormuz has served as the direct cause.

According to the American Automobile Association (AAA), average retail gasoline prices across the U.S. approached 4.10 U.S. dollars per gallon as of the 23rd, up roughly 37.5% since the outbreak of the war. Bureau of Labor Statistics (BLS) data also showed that energy prices in July jumped 14.7% year over year.

While the Consumer Price Index (CPI) eased somewhat to 3.4% in July, it had reached a three-year high just two months earlier.

President Kashkari pointed out that Americans have faced persistent inflation since the COVID-19 pandemic.

He remarked, "Ever since the COVID-19 pandemic, we have continually projected inflation returning to target, yet that timeline keeps getting pushed back," concluding that "ultimately, we will likely need to do more."

                                                                                                            Park Jin-sook