Fed’s Kashkari tells CNBC that inflation fight takes priority as labor market is 'in decent shape'

Minneapolis Federal Reserve President Neel Kashkari said Thursday that bringing down inflation in the U.S. remains his top priority, warning that consumer prices are still "much too high."

Speaking to CNBC's Kaori Enjoji at the Bank of Japan-IMES Conference, Kashkari said that the U.S. central bank would continue taking a "balanced approach" to its dual mandate of price stability and full employment.

Still, he noted that inflation has remained above the Federal Reserve's 2% target for more than five years, while the labor market is in "decent shape" right now.

"I am focusing heavily on inflation. I'm not ignoring at all the labor market. We need to pay attention to both sides, but the labor market is in decent shape right now, while inflation is simply much too high," he said.

Kashkari added that the longer inflation remains elevated, the greater the risk that inflation expectations become unanchored and move higher.

"If that were to happen, then we'd have to respond even more aggressively, so we're much better off doing what we need to do to keep inflation expectations anchored."

U.S. headline inflation most recently stood at 3.8% in April. Excluding food and energy, the core CPI increased 0.4% and 2.8%, respectively.

Kashkari said that global inflationary pressures have been fuelled by the Covid-19 pandemic, tariffs, the war in Ukraine, and now, the conflict in Iran.