Kansas City Fed President: Inflation Still 'Sticky', Central Bank Hasn't Broken Through

Kansas City Federal Reserve President Jeffrey Schmid stated that inflation is 'still stubborn and it's still sticky.' He believes that the central bank has not yet managed to break through, indicating a need for further action.

Schmid made these remarks during an interview with CNBC on Thursday. The central bank's preferred inflation gauge rose 0.2% in July, in line with forecasts from analysts. This means the core personal consumption expenditures price index gained 0.2% last month and clocked in at 3.3% for the year.

The index that does not exclude more volatile components like food and energy also rose 0.2%, putting the annual inflation rate at 3.7%. This is above analysts' expectations. Schmid stated that 'I don't know what we're restricting currently with the rate policy that we're at today,' but 'I do know moving the rate does change behaviors in the market.'

The central bank kept rates unchanged in its July meeting, but three officials voted for a hike. Cleveland Federal Reserve president Beth Hammack said earlier this month that more than one interest rate hike could be needed.