Jeffrey Schmid and Beth Hammack Express Concern Over Stubborn U.S. Inflation at Jackson Hole Symposium
Federal Reserve officials expressed significant concern regarding persistent U.S. inflation during the annual economic symposium in Jackson Hole. Kansas City Fed President Jeffrey Schmid stated that current inflation remains stubborn and sticky, noting that the current policy rate does not appear to be restrictive enough to break through price pressures. Schmid suggested that while he favors a path of raising rates, he requires more information on the demand side of growth before committing to a September hike. Cleveland Fed President Beth Hammack reiterated her willingness to act to bring price pressures back in line, warning that the longer inflation remains above target, the greater the risk to the central bank's credibility. Hammack forecasted that inflation may only reach the mid-twos by next year at best. Chicago Fed President Austan Goolsbee also noted that energy costs and the constant oscillation in the administration's tariffs have contributed to household costs. Goolsbee warned that political interference in monetary policy, a hallmark of the relationship between President Trump and the central bank, could cause inflation to return. The symposium highlights a growing consensus among regional bank chiefs that current monetary policy is not yet sufficient to restrain the economy.