Fed's Schmid warns inflation battle far from over

Kansas City Federal Reserve President Jeffrey Schmid emphasized on Tuesday that the US central bank still has significant work ahead in its battle against inflation. Speaking about the economic landscape, Schmid noted that while the labor market remains strong, the high cost of living continues to be a pressing concern. He described inflation as "frustrating" and stressed the need to address it, warning that the Fed's credibility is "at stake" in this fight.

Schmid highlighted that the Fed has a "way to go" to bring inflation down to its 2% target. He also pointed out that artificial intelligence (AI) has emerged as one of the largest drivers of inflation, contributing to the ongoing economic challenges. The comments come as the Fed continues to navigate the delicate balance between controlling inflation and maintaining a robust labor market.