Neel Kashkari, Interview: 2022 Northwoods Economic Development Summit

“So that is going to put, by shrinking our balance sheet, that it should be putting some upward pressure on long term interest rates, that complements what we’re doing with our federal funds rates. So we moved up these overnight interest rates and now we’re shrinking our balance sheet, both of those should be putting upward pressure on long term interest rates, which then translates into higher mortgage rates, higher borrowing costs if you were to buy a car, mortgage rates have gone from something like 3% to seven.”

“So if we keep raising rates or if we just went up 2% or 3% or 4% in one shot, it may well be that that’s too much and that we end up overdoing it needlessly. So by moving and looking at the data and seeing how the economy’s responding, it allows us to try to measure the dosage somewhat while still moving aggressively. But I got to say it’s not a crazy question, it’s a totally reasonable question and it’s a judgment call on should we be moving in 50 basis point increments or 75 basis point instruments.”