(ReclaimingAmerica.net) – In a cause-and-effect observation that is damning to President Joe Biden, Federal Reserve Bank of Minneapolis President Neel Kashkari has declared that the escalating levels of illegal immigration are contributing to persistent high inflation and interest rates.
In an interview with the Telegraph, Kashkari expressed his hesitation to reduce interest rates until he observes “several months of real progress on inflation,” pointing out that the influx of immigrants is impeding such progress.
Consequently, he anticipates that U.S. borrowing costs will remain unchanged for “an extended period of time.”
Kashkari’s anxiety is notably intense concerning the housing market, which continues to surge in demand despite the deterrent of high interest rates.
He challenged the narrative put forth by the Biden administration and its supporters, who argue that increased immigration suppresses inflation by lowering wages.
Instead, Kashkari highlighted that the “dramatic increase in immigration” is exacerbating the demand for housing, compounded by more individuals working remotely and a long-standing deficit in housing construction, which he described as a “perfect storm” maintaining the robustness of the housing market.
“[If the] dramatic increase in immigration were to be sustained, I think it would have a meaningful imprint on the economy,” Kashkari articulated, as cited by Breitbart News.
“Housing is traditionally the most interest-rate sensitive sector of the economy. And it has shown remarkable resilience and even some evidence that new leases are ticking back up,” Kashkari stated.
“That’s also particularly concerning because when we do the math, it takes a year or more for new leases to translate into the actual measured inflation number. And if new leases are now ticking back up, that’s particularly concerning,” he added.
In light of the housing shortages post-financial crisis and the recent pandemic, coupled with a significant increase in immigration, there has been a heightened demand for housing.
“And then we have a big surge in immigration in the last few years. They obviously need a place to live. All of these factors could be propping up demand for housing,” Kashkari said.
Since mid-2023, the Federal Reserve has maintained interest rates between 5.25 percent and 5.5 percent. At the beginning of the year, expectations were set for multiple rate cuts; however, with inflation reaching an annualized rate of 3.4 percent in the first quarter, such predictions were reassessed.
Kashkari emphasized that rate reductions are unlikely in the near future and did not dismiss the potential for a rate increase, although he viewed it as improbable.
“I think the balance of risks suggests it will likely be down but we shouldn’t rule anything out at this point. I think a more likely scenario is that we sit where we are for an extended period of time,” he commented.
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