Schmid Seeks Tighter Monetary Policy to Tame High Inflation

Federal Reserve Bank of Kansas City President Jeff Schmid is calling for tighter monetary policy to combat high inflation, which he believes is too high. In a recent speech, Schmid emphasized that his primary concern is inflation and that current data suggests monetary policy is not restrictive enough to address price pressures.

'The economy appears to be performing well with the notable exception of inflation,' Schmid said in the text of his speech. He noted that while recent inflation data showed a deceleration, it would be premature to put too much weight on a single data point relative to recent trends.

Schmid also highlighted the impact of supply shocks and energy prices on inflation. 'Though the most recent inflation data for June showed an encouraging deceleration, it would be premature to put too much weight on a single data point relative to recent trends,' he said.

With oil prices rising again, Schmid expressed uncertainty about how persistent any relief from higher energy prices will be. He also pointed out that underlying levels of inflation are too high relative to the Fed's 2% target and that AI investment is pushing up inflation in a way the Fed cannot ignore.