Kansas Fed Chief Sounds Warning on Stubborn Inflation

Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, expressed concerns about the US inflation rate during an interview on CNBC at the Jackson Hole symposium. He stated that inflation is 'still stubborn and sticky' and that policymakers need to find ways to address it.

Schmid questioned whether the current benchmark interest rate of 3.50 to 3.75 percent is effectively restraining the economy, saying 'I'm not sure what we're restricting with the current interest rate policy.'

Despite this, he stopped short of endorsing a rate increase, citing the need for more information on demand-side factors driving growth and inflation.

The recent personal consumption expenditures (PCE) price index for July rose 3.7 percent year-over-year, exceeding market consensus.