Schmid’s television appearance lands squarely within the week the Fed itself has put centre stage, with the Kansas City Fed’s own Jackson Hole symposium running Thursday through Saturday and drawing the world’s central banking community to Wyoming. Given Schmid’s role as host of the event and his recent public comments arguing that policy is not currently restrictive and that further tightening is needed, any repetition or hardening of that stance on air could reinforce hawkish rate expectations and put modest upward pressure on short end yields and the dollar. The symposium’s own theme this year, financial innovation and its implications for payments and policy, means the week’s formal sessions may not directly address the inflation debate, leaving television appearances such as Schmid’s as one of the more direct channels for gauging where individual committee members stand. Any softening in his tone, or acknowledgment of labour market risk, would be read as a signal that even the more hawkish members see room for patience.
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The Fed’s attention is on Jackson Hole this week, and one of its more hawkish voices is taking his case to national television.
Summary:
- Kansas City Fed President Jeff Schmid is scheduled to be interviewed on Fox Business at 7.30am US Eastern time on Thursday
- The interview coincides with the Kansas City Fed’s own Jackson Hole Economic Policy Symposium, running Thursday to Saturday at the Jackson Lake Lodge in Jackson Hole, Wyoming
- This year’s symposium theme is Financial Innovation: Implications for Payments and Policy, with sessions focused on digital payments, central bank digital currencies and fintech, and roughly 120 central bankers, policymakers, economists and academics from more than 70 countries expected to attend
- Fed Chairman Kevin Warsh is due to speak at the symposium on Friday, having so far kept his own inflation views private ahead of the address
- In early August, Schmid said inflation remains his primary concern and argued the current stance of monetary policy is not restrictive given the strength of demand and investment (Reuters, Bloomberg)
- Schmid said bringing inflation back to the Fed’s 2 per cent objective will require tighter policy, not simply holding rates steady, and pushed back on attributing high inflation solely to supply shocks such as tariffs and energy prices (Bloomberg)
Kansas City Fed President Jeff Schmid is set to appear on Fox Business at 7.30am US Eastern time on Thursday, a high profile television slot that falls in the same week his own regional bank is hosting the Fed’s most closely watched annual gathering.
The Kansas City Fed’s Jackson Hole Economic Policy Symposium runs from Thursday through Saturday at the Jackson Lake Lodge in Jackson Hole, Wyoming, drawing around 120 central bankers, policymakers, economists and academics from more than 70 countries. This year’s theme, Financial Innovation: Implications for Payments and Policy, centres on how developments in digital payments, central bank digital currencies and financial technology are reshaping monetary transmission and regulatory frameworks, a focus that sits apart from the immediate inflation debate dominating markets. As the symposium’s host, Schmid’s Fox Business appearance offers one of the more direct opportunities this week for investors to hear from a sitting Fed official on the near term policy outlook, even as the formal programme looks further ahead.
The interview also comes as Fed Chairman Kevin Warsh continues to withhold his own view on whether current inflation reflects temporary shocks or a more entrenched overheating problem, a stance he has defended as part of an effort to communicate less and avoid forecasts hardening into commitments, according to the Wall Street Journal. Warsh is due to speak at the symposium on Friday, and that address will be closely watched for any indication of where he ultimately comes down on the debate splitting his own committee.
Schmid himself has been among the more hawkish voices on the Federal Open Market Committee this year. In early August, he told an audience in Omaha that inflation remains his primary concern, arguing that given the strength of demand and investment in the economy, current monetary policy should not be considered restrictive. He said that bringing inflation back down to the Fed’s 2 per cent target would require tighter policy rather than simply holding rates at their current level, according to Reuters and Bloomberg reporting on the speech.
Schmid also pushed back against the idea that elevated inflation can be attributed mainly to a series of supply shocks, including tariffs and higher energy prices tied to the conflict in the Middle East. He argued instead that inflation is fundamentally a function of the balance between supply and demand, and that persistent price pressures are unlikely without underlying demand remaining strong. He pointed to inflation excluding energy running at around 3.2 per cent over the prior 12 months, roughly half a percentage point higher than the same period a year earlier, as evidence that price pressures extend beyond energy related categories. While he acknowledged a recent uptick in core inflation looked encouraging, he cautioned it would be premature to draw firm conclusions from a single data point.
Thursday’s Fox Business appearance will offer Schmid a national platform to expand on, or potentially recalibrate, those views just as the symposium he hosts gets under way. Three FOMC members voted to raise rates at last month’s meeting, the most dissents in a decade, while other officials have pointed to signs of softening consumer demand as reason for caution. Any fresh comments from Schmid on the September meeting or on how he is weighing recent inflation and growth data are likely to be closely parsed by markets already attuned to the broader uncertainty over the Fed’s next move.
This article was written by Eamonn Sheridan at investinglive.com.