UNFI Talks Supply Chain, Inflation With Minneapolis Fed President Neel Kashkari

Wholesaler United Natural Foods Inc. (UNFI) hosted a Feb. 16 town hall discussion on inflation, employment, monetary policy and the Federal Reserve’s response to the COVID-19 pandemic with Federal Reserve Bank of Minneapolis President Neel Kashkari. UNFI CFO John Howard led the discussion on the Federal Reserve’s perspectives and actions related to the current economic dynamics.

Ahead of the town hall, Howard welcomed the opportunity for UNFI and its associates “to hear from Neel who not only has a front row seat, but an important voice on some of the hottest topics facing our country today, including inflation, the Racism and the Economy initiative, and today’s labor market.”

This event, which was open to UNFI employees and the public via live stream, discussed inflation and the monetary policy the U.S. central bank is doing to deal with it. He also discussed the issue of high inflation and warned about the possibility of raising rates too much or too fast.  

Kashkari told UNFI associates at the town hall, "My caution to my colleagues, and to myself, is, 'Let's not overdo it.' " He explained that other factors such as an aging population will tend to pull inflation down over time and that "if we raise rates really aggressively, we run the risk of slamming the brakes on the economy, putting the economy into recession." Which he said "we'd be crashing back down into this low inflation environment."

Addressing today’s economy and the Federal Reserve’s role in providing the country with a safe, flexible and stable monetary and financial system, Kashkari also touched on supply chain issues. Howard asked Kashkari that as spending and consumption gets closer to a new normal in terms of supply chain, when did he expect to see a normalization in supply chain.

"Large global businesses that we talk to have reported that as soon as they put out one fire in one corner of their supply chain something else is brewing somewhere else,” he said. 

To put it into perspective, he relayed a personal story of how he and his family had COVID and for three weeks there was a disruption in his and his wife’s work. And how you multiply that by millions in order to get a perspective of people across the U.S. dealing with it.

"A lot of families are experiencing what we just experienced," he said, explaining that “this will be a while” before supply chains can catch up to these disruptions.

When talking about the inflationary environment the country is currently in, Kashkari said, “Most public sector or most private forecasters estimate that inflation by the end of this year will probably be around the 3% number.”

UNFI is North America's premier food wholesaler and is the largest publicly-traded grocery distributor in America.