Kansas City Fed's Schmid says inflation 'stubborn' and 'sticky,' policy rate not restrictive
CNBC • • business
Key Points:
- Kansas City Federal Reserve President Jeffrey Schmid stated that inflation remains too high and persistent, though he did not explicitly call for an interest rate hike during his remarks at the Fed's symposium in Jackson Hole.
- Schmid highlighted that core inflation rose 3.3% year-over-year, well above the Fed's 2% target, and questioned whether the current policy rate of 3.5%-3.75% is sufficiently restrictive given ongoing economic growth and a 4.1% unemployment rate.
- He expressed uncertainty about supporting a rate increase at this time, emphasizing the need for more data to understand the demand factors driving both inflation and growth.
- Although not a voting member of the FOMC this year, Schmid continues to share his views and previously dissented against rate cuts in 2023.
- Schmid also mentioned there may be "some room" to consider reducing the number of FOMC meetings from eight to six annually, an idea recently proposed by former Fed Chairman Kevin Warsh.
