By Michael S. Derby <\/p>\n
Aug 27 (Reuters) – Two Federal Reserve officials on Thursday shared their ongoing concerns about the U.S. inflation outlook, as central bankers gathered in Jackson Hole, Wyoming for the Kansas City Fed’s closely watched annual economic symposium. <\/p>\n
Inflation is “still stubborn and it’s still sticky and we’ve \u200cgot to continue to find ways to break through” and get it back to 2%, Kansas City Fed President Jeffrey Schmid said on CNBC \u200con the sidelines of the conference. <\/p>\n
He noted that the U.S. central bank’s current 3.50%-3.75% policy rate did not appear to be restrictive. <\/p>\n
“I don’t know what we’re restricting currently with the rate policy that we’re \u200bat today,” Schmid said. <\/p>\n
Schmid, who had recently been in favor of raising rates to help bring inflation back down to the Fed’s 2% target, seemed to suggest that he would still favor such a path, given his belief that monetary policy is not working to counter current price pressures. <\/p>\n
But even so, when asked about the outlook for a rate hike at the Fed’s September 15-16 policy meeting, he said, “I think we need a little bit more information. What I’m trying to figure out is the demand side of what’s \u200cdriving both growth and inflation.” <\/p>\n
Chicago Fed President Austan Goolsbee described \u2060the environment in which inflation has been running above the Fed’s target for more than five years as partly “disturbing.” <\/p>\n
“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 \u2060said on the Rapid Response podcast. “We hear a lot about affordability and we better be mindful because if inflation starts going up again, it’s very hard to get rid of it.” <\/p>\n
Goolsbee noted that rises in energy costs tied to the war in Iran and the constant oscillation in the Trump administration’s tariffs are also a concern, as they’re hitting households at \u200ba \u200btime of unacceptably high inflation. He said there is a danger the public could shift toward \u200ba view that above-target price pressures are not going away. <\/p>\n
The Chicago \u200cFed chief, however, noted that the recent three-month inflation trend “doesn’t look terrible.” Asked about his outlook for interest rates, Goolsbee said the Fed’s policy rate could be lowered over time if there was evidence inflation was heading back to the 2% level. <\/p>\n
“If you’re a very interest-rate-sensitive industry, I would tell you, watch the data” and “don’t get so hyped up about what the market says” about the monetary policy outlook, he told the podcast. <\/p>\n
FOCUS TURNS TO WARSH’S SPEECH <\/p>\n
Schmid and Goolsbee spoke a day after the government reported that the Personal Consumption Expenditures Price Index, the central bank’s main inflation gauge, stood at 3.7% in the 12 months through July, matching the level seen in \u200cJune but down from the 4.1% year-over-year increase in May. <\/p>\n
Economists’ reaction to the data was mixed, \u200bwith some saying the sturdy reading argued for a rate hike next month, while others said \u200bit kept tightening in play at some point this year. Futures markets lean \u200bagainst an increase at the next meeting, but put strong odds of it happening by the end of 2026. <\/p>\n
Fed Chairman Kevin Warsh \u200cis slated to speak on Friday at the Jackson Hole event. \u200bMany hope he will share clues about \u200bthe policy outlook, but those expectations are tempered by the fact that the new U.S. central bank chief is opposed to providing firm forward guidance about rates, and has even refrained, amid mounting controversy, from explaining how he reaches monetary policy decisions. <\/p>\n
A number of Fed officials have said in recent weeks \u200bthat rate hikes are needed to lower inflation, or at \u200cleast signaled openness to that path. <\/p>\n
In his podcast remarks, Goolsbee also noted that a series of political attacks on the Fed, a hallmark of \u200bPresident Donald Trump’s relationship with the central bank, “puts me on edge.” In nations where political authorities interfere with monetary policy choices, “inflation comes roaring \u200bback,” he said. <\/p>\n
(Reporting by Michael S. Derby; Editing by Andrew Heavens and Paul Simao) <\/p>\n","protected":false},"excerpt":{"rendered":"By Michael S. Derby Aug 27 (Reuters) – Two Federal Reserve officials on Thursday shared their ongoing concerns…\n","protected":false},"author":3,"featured_media":1027884,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[10852,64,79,18595,343515,1663,94803,88924,2177,63558,67,132,68],"class_list":["post-1027883","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-austan-goolsbee","tag-business","tag-economy","tag-inflation-gauge","tag-inflation-trend","tag-jackson-hole","tag-jeffrey-schmid","tag-kansas-city-fed","tag-monetary-policy","tag-the-fed","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/117168872185515130","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/1027883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=1027883"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/1027883\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/1027884"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=1027883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=1027883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=1027883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}