Fed's Schmid Raises Possibility Of Rate Hikes As Inflation Persists
By CU Today Staff —
TOPEKA, Kans.--Kansas City Federal Reserve President Jeffrey Schmid suggested Thursday that the Federal Reserve's next policy debate may center on whether to keep interest rates steady or raise them further, signaling growing concern that inflation remains stubbornly above the central bank's target, according to Reuters.
Speaking at an economic forum in Oklahoma, Schmid said inflation appears to have moved back into the 3.5% range and questioned whether recent price pressures will prove temporary or require additional action from policymakers. He said the Fed must decide whether to remain patient or consider raising rates by a quarter-point or more to bring inflation under control, Reuters reported.
The comments reflect mounting concern among some Fed officials that inflation initially driven by tariffs and higher energy prices could become more persistent. Inflation has remained above the Fed's 2% target for more than five years, complicating the central bank's efforts to balance price stability with economic growth, according to Reuters.
Notably, Schmid did not discuss the possibility of rate cuts, which had been widely expected by many policymakers earlier this year. The Fed is scheduled to meet June 16-17 and is broadly expected to leave its benchmark rate unchanged at 3.5% to 3.75%, where it has remained since December, Reuters reported.
Originally reported by CU Today.