Fed Official Calls for Tighter Monetary Policy to Combat 'Too High' Inflation

Federal Reserve Bank of Kansas City President Jeff Schmid has called for tighter monetary policy to combat 'too high' inflation, which he believes is above the central bank's target rate. In a speech, Schmid stated that while the economy appears to be performing well in many areas, inflation remains his primary concern.

Schmid pointed out that recent data does not indicate that current monetary policy is restrictive enough to counteract price pressures. As such, he believes that bringing inflation back down to the 2% target will require tighter policy.

He noted that while there has been some relief from higher energy prices in recent months, this may be short-lived due to ongoing global events. Schmid also emphasized that underlying levels of inflation are too high and that AI investment is contributing to rising prices that the Fed cannot ignore.