Transcript: Minneapolis Fed President and CEO Neel Kashkari on “Face the Nation with Margaret Brennan,” May 3, 2026

The following is the transcript of an interview with Minneapolis Fed president and CEO Neel Kashkari that aired on “Face the Nation with Margaret Brennan” on May 3, 2026.

MARGARET BRENNAN: We now go to Neel Kashkari, who is the President and CEO of the Federal Reserve Bank of Minneapolis. Hello.

NEEL KASHKARI (President, Federal Reserve Bank of Minneapolis): Hello, Margaret.

MARGARET BRENNAN: So, the Federal Reserve kept interest rates unchanged this past week, and on Wednesday, you were one of three federal presidents to signal that future rate cuts may not be appropriate and that hikes may be in the cards. You – you denied it – are you saying that the financial markets and the White House should no longer expect the Fed to lower rates?

KASHKARI: I think we all need to be open-minded about where interest rates are going, because there's a lot of uncertainty coming out of the Middle East. You know, I think I'm very focused, and a lot of my colleagues, what's going on in Iran, how long the Strait of Hormuz is closed, and the longer it's closed, the higher energy prices and the higher the fertilizer prices are going to be, the bigger impact that's going to have on inflation here in America, and we at the Fed have to take that on board. So, I was just saying that there is a lot of uncertainty about the outlook in the Middle East right now, I don't feel comfortable suggesting that a rate cut is on the cards. You know, we might be–in worst cases, we might have to go the other way.

MARGARET BRENNAN: I know you've been listening to Kevin Hassett, the president's economic adviser. He wasn't exactly answering the question of what would happen next, but he was painting a picture of continued tension. And I'm wondering now, as we're in week 10 of this tightening, however defined, how will you be able to judge the shocks to inflation in the next few weeks until you get to that June meeting?

KASHKARI: Well, I'll give you an example. So, the price impact, energy impact and energy prices from the Iran conflict are already, by some measures, as great or greater than when Russia invaded Ukraine. So, it's already having a big impact and we're seeing it- you mean the PCE data- we're already seeing it in the inflation numbers here at home. I spoke with the CEO of a global company headquartered in Minnesota with global supply chains last week, and they estimated that even if the strait were to reopen today, it would likely take six months for their supply chains to return to something normal. So I think for the Fed, we're going to have to look at what's happening in the Middle East and the inflation data very carefully. That should guide us. But if it's a six-month process for inflation to return to normal, or something like normal, in the best-case scenario, I'm also very concerned about something that's not the best-case scenario, and what that might do to prices here at home.

MARGARET BRENNAN: So, we'll hear from the CEO of Chevron later in the program. He also talks about many, many factors that may keep electricity prices rising for some time. In your published book, you explain why you are against it, and say that the labor market has been, quote, “low hiring, low fire place” for a long time. Right now, we're seeing corporate layoffs going on, and I'm wondering what dynamics you think are at play now, and how the energy shock will play into it.

KASHKARI: Well, so far, recently, the labor market has shown signs of stability. So if you look at jobless claims and new jobless claims, they are very low. The unemployment rate reached 4.3%. It has bounced a bit over the past six months, so it appears that most of the labor market is going sideways. But the bigger the inflationary shock from the Middle East, the more it will force Americans to cut their money, because they have to pay for gas, for example, to cut some money. That could have a way of slowing economic growth, which could even reverse some of the weakness in the labor market. So at this moment, the labor market seems to be fine, but if this conflict continues for a long time, or if it gets worse from here, then I think that would be a real slowdown in the growth trajectory of the US economy, and it will not be equal to who is affected by that unfortunately.

MARGARET BRENNAN: When you say long, what do you mean by that? We are in week ten.

KASHKARI: Well, I mean it could go on for months? Will it continue until the end of the year? I just don't know. I am not a foreign policy expert, but we are watching carefully. And you know, the challenge that the Fed is facing right now is around the uncertainty of the inflation outlook, stemming from what's happening in the Middle East, and there seems to be a lot of uncertainty going forward, from what I can read.

MARGARET BRENNAN: I want to ask you about what's happening with the Fed as an institution. The Senate Banking Committee has voted to advance the nomination of Kevin Warsh as chairman of the Federal Reserve. He is expected to be confirmed in mid-May. During his testimony, he said the Fed has mishandled inflation in the past few years, and said the Fed needs to quote, shake it hard with “a good family fight.” Do you agree with that? Need a good family fight and a change in the way you do business?

KASHKARI: Well, I think we're all looking forward to Kevin finishing his confirmation process, and we're looking forward to working with him and hearing his ideas. Some of the things he talked about, I think we can accept testing, how we communicate, this thing we call the dot plot he talked about. I think many of us would like to check that out. There are things about the balance sheet and how we use the balance sheet. I think those are also- I think we would welcome a new examination of some of these policies. And so I think somebody comes in and says, hey, let's reevaluate how we use some of our tools, I think those are good conversations to have. I don't think we're going to be physically fighting I think we're going to have robust discussions about the benefits and costs of these various tools, and I think that would be a good thing to have.

MARGARET BRENNAN: Or how do you measure inflation?

KASHKARI: Well, I think there are many different ways to measure inflation. He talked about it in his confirmation hearing some of his favorite moves. We're always looking at different ways to measure inflation, and at different times, certain measures seem to do a better job than others, so I think we need to evaluate all those options objectively and figure out what the best measuring tool is going forward.

MARGARET BRENNAN: Immediately, the national debt is now bigger than the US economy. One- over 100% of GDP to record here. What danger does that pose?

KASHKARI: Well, nobody knows. You know how big the danger zone is and where it will actually start some kind of disaster. If you look, I know you know this, if you look at the CBO's forecast of where the debt is going, it's headed for an unsustainable level. Ultimately, this is the job of fiscal policymakers, Congress and the executive branch, to come together to put us on a fiscally sound path, which we are not currently on. I don't see an immediate disaster, but in the long run it will be a problem, and eventually our political system has to solve it.

MARGARET BRENNAN: Neel Kashkari, thanks for sharing your insight this morning, and we'll be back now with more Face the Nation. Stay with us.