The Federal Reserve’s September economic projections are public, and Minneapolis Fed President Neel Kashkari says inflation is still a problem. Two weeks after the Fed published its projections, he said price growth remains too high, even after a cooler-than-expected inflation reading.

What the Fed released

The Federal Reserve Board and the Federal Open Market Committee released the projections on September 16, 2026, at 2:00 p.m. EDT. The Fed says the attached tables and charts summarize the economic projections made by FOMC participants in conjunction with the September 15–16 meeting. Projections like these reflect participants’ expectations. They are not a guarantee of where the economy or policy will end up.

The Fed’s release is a pointer to the tables and charts rather than a narrative. The specific figures for growth, unemployment, inflation and interest rates are in the projections PDF linked from the Federal Reserve’s press release.

Why Kashkari is still worried

Kashkari spoke on Wednesday, September 30, 2026, in an interview with CNBC’s Steve Liesman at a Council on Foreign Relations event in New York. CNBC reports he said, “Inflation is still too high.”

His comments came the same morning the August personal consumption expenditures, or PCE, price index was released. PCE is the Fed’s preferred inflation gauge. CNBC reports the core version, which strips out food and energy, came in lower than economists had forecast, at 3% on an annual basis.

Kashkari was not persuaded that one softer reading changes much. “There are many different measures of inflation, but it’s running at around a 3% rate,” he said, adding that it has been elevated for more than five years. “I didn’t think the inflation data today really changed that story for me very much.”

A resilient economy, a decent job market

Kashkari described other data released that day, on consumer spending and gross domestic product, as showing a “resilient” economy. He called the labor market “pretty good” but not “great.” CNBC notes that ADP reported private payrolls expanded by more than economists predicted in September.

He also said a conversation with a labor union leader, who told him inflation was “worse” than a recession for their members, has shaped how he weighs stable prices against employment.

Rates, the neutral rate and AI

CNBC reports that the Fed this month issued its first interest rate hike in three years and signaled another increase could be coming. That is CNBC’s account of the Fed’s recent action. The Fed’s own projections release does not describe the decision, so check the Fed’s policy statement for the exact language.

Kashkari said the economy’s strength through recent shocks has led him to raise his estimate of the neutral federal funds rate to 3.25%. The neutral rate is the level at which policy neither speeds up nor slows down the economy. This is his personal estimate, not an official Fed figure. He said it is likely elevated only temporarily because of demand for investment capital during the artificial intelligence boom.

He was cautious about that boom. If the AI buildout works, he said, it can lift U.S. productivity. But he said, “The fruits have not yet borne out,” and warned that if the investment proves far less productive than assumed, it “will have been malinvestment,” with possible big consequences for the broader economy. He acknowledged that rate hikes may not slow the largest AI spenders by “much,” but said higher borrowing costs could help in other parts of the economy.

What to watch

Two things stand out. First, one cooler monthly inflation reading does not settle the debate among Fed officials, and Kashkari’s view is only one voice on the committee. Second, a rate hike and a higher neutral-rate estimate point to borrowing costs staying a live issue. Households with variable-rate debt may feel rate changes sooner than those with fixed-rate loans, whose terms are set when the loan is made.

For the full picture, read the Fed’s projections PDF alongside the policy statement, and watch the next PCE release for whether the roughly 3% pace Kashkari described holds.

For education and information only. This report does not provide personalized financial, investment, tax, or legal advice.

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