According to Neel Kashkari and Beth Hammack, rising energy prices mean that inflationary pressures on the US economy could become so high that the key interest rate must be raised.
On Wednesday, the Fed's Federal Open Market Committee (FOMC) decided, by a vote of 8–4, to leave the interest rate unchanged in the range of 3.50–3.75 percent.
At the time, Kashkari and Hammack were two of three FOMC members who objected to wording in the forward-looking minutes that indicated the next change would be a cut.
All of the minutes' wording is being scrutinized by markets, and in an essay released on Friday, Kashkari wrote that he wants language indicating either a reduction or an increase.
"This could tighten financial conditions somewhat today, counteracting a high-inflation scenario that could require an even stronger monetary policy response."
In another statement, Hammack said that oil prices are contributing to inflationary pressures.
“Uncertainty surrounding the economic outlook has increased in 2026 and also makes future monetary policy more uncertain.”
Inflationary pressures are making it difficult for new Fed Chairman Kevin Warsh, who takes office on May 15, to meet President Donald Trump's demands for rapid rate cuts.
