(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said he sees a 60% chance the US central bank can bring inflation down to its 2% target without causing severe damage to the economy.

In a letter published Tuesday on the Minneapolis Fed’s website, Kashkari laid out two potential scenarios for the Fed’s response to inflation going forward. One, the “soft-landing” path, would likely see policymakers raise rates once more before holding them steady in order to fully cool inflation. In the other, to which he ascribed a 40% likelihood, inflation would be more entrenched and require further rate increases to bring under control.

“After potentially one more 25-basis-point federal funds rate increase later this year, the FOMC holds policy at this level long enough to bring inflation back to target in a reasonable period of time,” Kashkari said of a “soft landing” scenario.

Officials last week left their benchmark interest rate unchanged in a range of 5.25% to 5.5%, the highest level in 22 years, and signaled rates will need to stay higher for longer to contain inflation. 

Kashkari, a voter on monetary policy this year, said Monday that he’s one of the 12 Fed officials who forecast one more rate increase this year in projections released following last week’s meeting. The remaining seven officials estimated no more increases would be necessary in 2023.

“If the economy is fundamentally much stronger than we realized, on the margin that would tell me rates probably have to go a little bit higher and then be held higher for longer to cool things off,” Kashkari said at an event at the University of Pennsylvania’s Wharton School.

Consumer prices increased in August, fueled by higher energy costs. A measure stripping out food and energy also rose, accelerating for the first time since February amid a still-robust economy.

Fed officials are moving at a slower pace and have refrained from raising rates at two meetings this year. Now that interest rates are at a restrictive level, they’re trying to carefully calibrate how much higher they’ll need to push them, while at the same time seeing if the disinflation the economy has seen so far will continue. 

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