Comments from Kansas City Fed’s Schmid cross the wires:
- Supported the rate hike; recent data suggest inflation trending above 3%
- The rate hike was a step towards returning to the 2% target
- The current inflation problem is “not just about energy” — price growth has been “hot” across a broad set of goods and services
- High inflation is a sign supply and demand are out of balance
- Outside of inflation, the economy is performing well
Analysis: Schmid’s message leans hawkish. He backed the recent hike and points to data showing inflation running above 3%, framing it as a broad-based problem rather than one driven by energy alone — that “hot” characterization across goods and services suggests he sees underlying price pressure as more persistent than transitory. Pairing that with his supply-demand imbalance comment reinforces the idea that he views current policy settings as still justified, if not in need of more work, to get back to target.
The one balancing note is his read on the broader economy — outside of inflation, he says it’s performing well, which suggests this isn’t a growth-scare argument for tightening but a straightforward inflation-fighting one. Next catalyst to watch: any upcoming inflation prints or FOMC commentary that would either confirm the above-3% trend he’s citing or push back against it.
This article was written by Greg Michalowski at investinglive.com.