Fed's Kashkari tweets scepticism on inflation after data

By Ann Saphir

SAN FRANCISCO (Reuters) - A sharp rise in underlying inflation last month was not enough to convince at least one Federal Reserve policymaker that further interest rate hikes will soon be needed to keep a lid on rising prices.

A government report Friday showed core U.S. consumer prices rose the most in 11 months in December, bolstering expectations that inflation will accelerate this year.

"I, for one, need to see more data," Minneapolis Federal Reserve Bank President Neel Kashkari said on Twitter, pushing back on the idea that inflation gains will convince Fed policymakers that inflation is on the upswing.

After the report, traders of short-term rate futures boosted bets the Fed will raise rates this year, and the yield on the two-year U.S. Treasury rose.

Kashkari, one of two Fed policymakers to dissent on last month's Fed decision to raise interest rates, is the only Fed policymaker who uses Twitter regularly to signal his policy views.

(Reporting by Ann SaphirEditing by Chizu Nomiyama)