MNI BRIEF: Fed's Kashkari: Inflation Lingering, Jobs Weakening

It's too soon to tell whether tariffs will have a persistent effect on inflation while demand for workers is weakening, Minneapolis Federal Reserve Bank President Neel Kashkari said Thursday. 

"Is that going to lead to a permanent increase in prices or is it just a one time event, and is it just goods prices, or does it spill over to other sectors of the economy? The short answer is, so far, it's too soon to know for sure," he said during Q&A at an event in Rapid City, South Dakota. 

"Part of the reason it's taking longer is that businesses had built up a lot of inventory at the beginning of the year, and so they've been working that inventory down, not having to pass all the costs on to their customers. But as they have to replenish that inventory, they're telling us at the beginning of the year we might start to see more of a tariff effect on prices." (See: MNI INTERVIEW: Fed Right To Remain Cautious On Rate Cuts-Kohn)

At the same time, the job market is slowing down, and not just because of immigration restrictions.

"Partially that has slowed down because we have dramatically fewer immigrants coming into this country, so fewer people needing jobs. But it has also slowed down, we think, because of underlying demand for workers has slowed down," Kashkari said.