Two Federal Reserve officials cautioned on Thursday that U.S. inflation remains stubbornly elevated as the central bank’s annual Jackson Hole symposium got underway in Wyoming.
Kansas City Fed President Jeffrey Schmid told CNBC that inflation is "still stubborn and it's still sticky" and that policymakers must continue efforts to return it to the Fed’s 2% target. The U.S. central bank’s policy rate currently stands at 3.50%–3.75%.
Schmid noted that the current rate environment may not be restrictive enough to meaningfully curb demand, saying, "I don’t know what we’re restricting currently with the rate policy that we’re at today." He added that he is seeking further data to assess the balance between growth and inflation dynamics ahead of the September 15–16 policy meeting.
Chicago Fed President Austan Goolsbee described the inflation backdrop as partly "disturbing" and warned that the risk of renewed price pressures remains salient. In remarks on the Rapid Response podcast, he stated, "Everybody should be on edge, and I would say my biggest fear in the short run continues to be that inflation is not under control." Goolsbee also cautioned interest-rate-sensitive industries to monitor incoming data rather than overreact to market signals.
The Personal Consumption Expenditures Price Index stood at 3.7% in the 12 months through July, unchanged from June but down from 4.1% in May. Inflation has remained above the Fed’s target for more than five years, underscoring the challenge facing policymakers as they deliberate on the next steps.
Fed Chairman Kevin Warsh is scheduled to speak at the Jackson Hole event on Friday, with markets closely parsing his remarks for signals on the trajectory of monetary policy.
