Fed's Kashkari: Far from victory on inflation, sees sharp rate hikes ahead

(Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Wednesday said that he continues to believe that the U.S. central bank will need to raise its policy rate to 3.9% by year-end and to 4.4% by the end of 2023 to fight inflation.

Though the cooling in price pressures evident in a government report released earlier Wednesday was "welcome," Kashkari said at the Aspen Ideas Conference that the Fed is "far, far away from declaring victory" and needs to raise rates much higher than its current 2.25%-2.5% range.

Markets are also "not realistic" in expecting rate cuts early next year, he said. The Fed won't do so "until we get convinced that inflation is well on its way" to the Fed's 2% target, he said.

(Reporting by Ann Saphir; Editing by Mark Porter)