Fed's Schmid Says 3.5%-3.75% Rate Is Not Restrictive as Core Inflation Runs at 3.3%
Updated
Updated · CNBC · Aug 27
Fed's Schmid Says 3.5%-3.75% Rate Is Not Restrictive as Core Inflation Runs at 3.3%
3 articles · Updated · CNBC · Aug 27
Summary
Jeffrey Schmid said the Fed's 3.5%-3.75% policy rate may not be restraining the economy, arguing inflation remains "stubborn" and "sticky" ahead of the next FOMC cycle.
Core prices rose 3.3% from a year earlier, the Commerce Department reported Wednesday, still well above the Fed's 2% target and reinforcing Schmid's concern that inflation has proved resilient.
Schmid tied that view to an economy growing 1.5% in the second quarter and unemployment at 4.1%, saying he is still trying to gauge how demand is driving both growth and inflation.
The Kansas City Fed chief stopped short of backing a rate hike, saying he needs more information; though not an FOMC voter this year, he dissented twice against rate cuts when he voted last year.
At Jackson Hole, Schmid also said he sees some room to consider cutting scheduled FOMC meetings to six a year from eight, echoing an idea Chairman Kevin Warsh raised in July.