Minneapolis Fed President Neel Kashkari on the outlook, rates and monetary policy — 9/30/2026

The U.S. economy demonstrates remarkable resilience in the face of persistent inflation and geopolitical shocks, driven largely by robust consumer spending and massive capital investment in AI infrastructure. Minneapolis Fed President Neel Kashkari emphasizes that inflation remains too high, necessitating a cautious approach to monetary policy and a potential upward revision of the neutral federal funds rate. While AI-driven data center expansion acts as a significant engine of growth, it creates uncertainty regarding long-term productivity gains and the potential for inefficient capital allocation. The labor market remains stable, with low unemployment, yet the Federal Reserve must navigate the complexities of a de-globalized environment where supply shocks appear increasingly endemic. Policymakers continue to monitor these developments, balancing the need to stabilize inflation expectations against the risk of stifling economic growth through overly restrictive interest rates.