Kansas City Fed President Schmid says inflation is persistent and rates not restrictive

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Kansas City Federal Reserve President Jeffrey Schmid stated on Thursday that inflation remained stubborn and expressed doubt that current interest rates of 3.5%-3.75% were restrictive enough to meet the Federal Reserve's 2% target. Speaking at the Jackson Hole symposium, Schmid pointed to recent Commerce Department data showing core inflation at 3.3% as evidence that the central bank had more work to do. While he questioned the efficacy of the current policy rate, Schmid noted that he required further information on demand-side drivers before deciding whether to support a rate increase.

Consequences

Schmid's remarks signaled a cautious approach within the Federal Open Market Committee regarding potential adjustments to interest rate policy. His public emphasis on the need for more data suggests that future economic reports on growth and inflation will remain central to the committee's decision-making process.

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