Inflation 'Stubborn' and 'Sticky', Kansas City Fed's Schmid Says Policy Rate Not Restrictive

Kansas City Federal Reserve President Jeffrey Schmid stated that inflation remains stubborn and sticky, despite previous efforts to combat it. Speaking at the central bank's annual symposium in Jackson Hole, Wyoming, he expressed concerns about the resilience of inflation.

In a CNBC interview, Schmid noted that core prices, excluding food and energy, rose 3.3% from a year ago, exceeding the Fed's 2% target. He acknowledged that the current policy rate target of 3.5%-3.75% may not be restrictive enough, given the economy's growth at 1.5% in the second quarter and an unemployment rate of 4.1%.

When asked if he would support a rate increase, Schmid replied that he needs more information about the demand side driving growth and inflation. He also mentioned considering the idea to reduce the number of FOMC meetings per year from eight to six, as proposed by Chairman Kevin Warsh in July.