Former Kansas City Fed Pres. Warns Inflation Target Can't Be Ignored

Esther George says the Fed must stay focused on its 2% inflation goal despite labor market strength.

Jan. 28, 2026 at 8:23am

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In an interview on CNBC's 'Squawk Box', former Kansas City Federal Reserve President Esther George warned that the central bank cannot ignore its 2% inflation target, even as the labor market remains strong. George discussed the Fed's upcoming policy meeting and the need to keep interest rates elevated to bring down high inflation.

Why it matters

George's comments underscore the difficult balancing act facing the Fed as it tries to rein in inflation without triggering a recession. The central bank has raised rates aggressively over the past year, but inflation remains well above its 2% goal, putting pressure on policymakers to stay the course despite a robust job market.

The details

George, who led the Kansas City Fed from 2011 to 2022, said the Fed must remain focused on its inflation target and not be swayed by the current strength of the labor market. She expects the central bank to raise rates further at its upcoming meeting, though the pace of hikes may slow. George cautioned that the Fed cannot ignore its inflation mandate, even as the job market continues to defy expectations.

  • The Federal Reserve is holding its next policy meeting this week.

The players

Esther George

Former president of the Federal Reserve Bank of Kansas City, serving from 2011 to 2022.

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What they’re saying

“The inflation target cannot be ignored by the Fed. They have to stay focused on that 2% goal.”

— Esther George, Former Kansas City Fed President (CNBC)

What’s next

The Federal Reserve is expected to announce its latest interest rate decision on Wednesday, January 31st.

The takeaway

George's comments underscore the difficult balancing act facing the Fed as it tries to bring down inflation without derailing the strong labor market. The central bank will need to stay the course on its rate hikes to meet its 2% inflation target, even as the economy shows resilience.