Fed's Schmid Sounds Alarm on 'Too High' Inflation, Calls for Tighter Policy

Federal Reserve Bank of Kansas City President Jeff Schmid has called for tighter monetary policy to bring down 'too high' inflation. He emphasized that while the economy is performing well, inflation remains a major concern.

Schmid pointed out that recent data suggests monetary policy is not restrictive enough to counteract price pressures. As such, he believes that tightening policy is necessary to get inflation back to the 2% target.

The official, who does not currently have a vote on the interest-rate-setting Federal Open Market Committee, did not specify when or by how much rates should be raised. However, his remarks are in line with other Fed officials who have signaled an openness to raising rates amid growing concerns about inflation.

Schmid also cautioned against downplaying inflation that results from supply shocks and noted that recent relief from higher energy prices has proved short-lived. He emphasized the need for a more sustainable approach to addressing inflation, particularly in light of rising oil prices.