SIOUX FALLS, S.D. (KELO) — This week the president of the Ninth Federal Reserve District is in Sioux Falls talking with business leaders about what’s happening in the local economy and the challenges they face.
Neel Kashkiri spoke about inflation, workforce challenges and his visit to Sioux Falls.
The Ninth Federal Reserve District is based in Minneapolis, which covers the Dakotas, Montana, Minnesota, and parts of Michigan and Wisconsin.
“Our job at the Minneapolis Fed is to represent this region in the nation’s economic policy process, and so a big part of my job is to make sure that I know what’s happening here on the ground in South Dakota, in Sioux Falls, because I go back to Washington D.C. every six weeks when we set interest rates for the nation,” Kashkiri said.
Kashkiri says it depends on how inflation is measured but that it’s in the 5-6% range now. He says it’s still much too high and that it’s the Federal Reserve’s job to bring inflation back down to around 2%.
“We’re absolutely going to do that. The question is how much more we have to do to raise interest rates to cool down the economy to bring inflation back down. We’ve raised rates a lot the last year. We have more to do, but we’re really trying to get a sense of how much further do we have to go, and we’re not sure yet,” he said.
Kashkiri also spoke about workforce shortages, and how he often hears from business owners that the labor market is “overheated” and “unsustainable.”
“We don’t want to cause a recession. We want people to find jobs. But we want there to be more balance in the economy,” he said.
It’s a problem he’s encountered here locally as well.
“The first meeting that I just had, the number one issue that businesses said is that they can’t find workers. That they’re still struggling to find the workers that they need. It’s not quite as hot as it was 6-9 months ago, but it is still very very hot. They’re not seeing much evidence of softness yet, and so that tells me we still have more work to do to cool demand down to get inflation back down to 2%,” Kashkiri said.
Another thing Kashkiri talked about was the booming population growth in the Sioux Falls region and how that can present other challenges such as affordable housing, which he says is an “acute” problem here.