Federal Reserve official Kashkari said inflation pressures are becoming more widespread, central bank may need to raise interest rates.

Minneapolis Fed President Neel Kashkari said signs of widespread inflation prompted him to forecast an interest rate hike this year in the Federal Reserve's earlier predictions. "I am concerned about inflation, which is not only related to the situation in the Middle East, but also to signs of more widespread inflation pressure in the economy," Kashkari said in an interview with Bloomberg News on Friday while attending the Aspen Ideas Festival in Colorado. After remaining basically stable in 2025, inflation showed signs of cooling early in the year, but has risen sharply in the past three months. While the Iran war has driven up oil prices, prices for many other categories of goods have also increased. This has heightened concerns among some Federal Reserve officials, who believe that inflationary pressures may be more widespread and persistent, and that the Fed may need to take stronger action. Kashkari acknowledged that the U.S. reached a ceasefire agreement with Iran, but noted that Iran appeared to have violated the agreement overnight. U.S. President Donald Trump said Friday morning that Iran attacked a cargo ship in the Strait of Hormuz. "I don't trust Iran," Kashkari said. "To what extent will they abide by the agreement? How much will the marketsincluding the oil market, the fertilizer market, and other related marketsreturn to normal, or will they experience prolonged pressure and uncertainty?" The interest rate forecast released after last week's Federal Reserve policy meeting showed that 9 out of 19 decision makers expected at least one rate hike this year. This has increased market bets on a rate hike by the Fed this year. Kashkari said he is not necessarily in a hurry to raise rates, nor does he expect further rate hikes in 2027he predicts that the Fed will maintain its policy unchanged by then, but emphasizes the need to observe the performance of subsequent data first. He had previously forecasted one rate cut this year. Speaking later in a discussion session that day, Kashkari said policymakers are committed to bringing inflation back to the Fed's target level. "How do we bring inflation down in a reasonable time frame without causing significant damage to the labor market," Kashkari said. "This is the challenge we are working on."