Fed official says he looks at the price of Stouffer's frozen lasagna to gauge inflation

• A Fed official has an interesting metric for gauging inflation: the price of frozen lasagna.
• Minneapolis Fed president Neel Kashkari told CNN Stouffer's frozen lasagna has increased from $16 to around $21.

A Fed official thinks he can tell inflation is still too high for interest-rate cuts using an unconventional metric: the price of frozen lasagna.

In an interview with CNN, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said he pays attention to the price of groceries, particularly Stouffer's frozen lasagna.

"I pay attention to grocery prices," Kashkari said. "There's this large tray of lasagna that I used to buy that used to cost $16.00, now it's around $21.00."

"That's my own little measuring stick of how inflation is going."

Kashkari's drawing attention to grocery prices highlights a stubborn trend in living costs that is helping keep interest rates elevated, with the consumer price index (CPI) for food still in double digits.

Prices for some of America's most popular food items have skyrocketed amid supply chain disruptions, with eggs jumping 60% in 2022 and cheeseburgers and steaks at risk of a surge due to a drop in the number of beef cows.

In his State of the Union address though, President Joe Biden highlighted food inflation was coming down, with BLS data showing consistent monthly declines in food CPI since July.

Still, sentiment among policymakers has turned hawkish since an unexpectedly strong jobs report released Friday brought unemployment down to the lowest rate since 1969, limiting the Fed's scope for premature rate cuts and knocking back optimism in markets.

Kashkari said the federal funds rate could now go as high as 5.4%, which is higher than general consensus among the Federal Open Market Committee (FOMC) of 5.1%, and would require three 25 basis point hikes this year.

His comments add to those of Raphael Bostic to Bloomberg, who suggested a higher peak for the benchmark rate if labor market strength was persistent.

Kashkari told CNN that while it isn't "impossible" that price rises could come down without the labor market taking a hit or the economy slipping into recession, but said there "wasn't a great track record of pulling that off."

Stouffer's didn't immediately respond to Insider's request for comment on the price of its Lasagna.