May 14 (Reuters) – Inflation is the biggest risk to a U.S. economy that has shown “remarkable resilience” in the face of numerous challenges, and the job market is \u200cstable, Kansas City Federal Reserve President Jeffrey Schmid said on Thursday.<\/p>\n
“I see continued \u200cinflation as the most pressing risk to the economy,” Schmid said in prepared remarks to a banking industry conference hosted \u200bby the Kansas City Fed. “While inflation has moderated significantly from its peak, in my discussions with business leaders across the Tenth District, it is clear that it is still too high.”<\/p>\n
Schmid, who is not a voter on monetary policy this year, did not comment on the outlook for interest \u200crates. But his emphasis on inflation \u2060indicates that he remains squarely within the Fed’s hawkish wing opposed to rate cuts as long as inflation continues running above target.<\/p>\n
Inflation by the \u2060measure the Fed uses to set its 2% target – the personal consumption expenditures price index – was running at 3.5% in March, the first month of the U.S.-Israeli led war against Iran that has triggered \u200bbig jumps \u200bin global crude oil prices and U.S. gasoline \u200bprices. Other inflation readings this week for \u200cApril suggest that headline PCE may have approached 4% last month and has widened beyond energy cost pressures.<\/p>\n
“Though the U.S. economy currently faces a number of challenges, it has also shown remarkable resilience,” Schmid said. “Geopolitical developments continue to create uncertainty. While the United States is less vulnerable to global energy disruptions than in the past, higher oil prices still drain household spending power \u200cand increase costs for businesses. Yet despite these headwinds, \u200beconomic fundamentals in the U.S. and in the Tenth \u200bDistrict remain sound.”<\/p>\n
Indeed U.S. gross domestic product \u200bgrowth picked up speed in the first quarter on the back of \u200cstrong business investment – especially in the technology \u200bsector and artificial intelligence \u200bspace – and continued consumer spending. Schmid noted that wealth gains from a record-high stock market have helped many consumers, especially from upper-income households, lift their spending.<\/p>\n
“Growth is positive, with economic \u200boutput expanding at a modest \u200cbut steady pace so far this year,” Schmid said. “Unemployment remains relatively low by historical \u200bstandards, and the labor market is functioning effectively – albeit in an unusual low-hire\/low-fire \u200benvironment.”<\/p>\n
(Reporting By Dan Burns; Editing by Chizu Nomiyama)<\/p>\n","protected":false},"excerpt":{"rendered":"May 14 (Reuters) – Inflation is the biggest risk to a U.S. economy that has shown “remarkable resilience”…\n","protected":false},"author":3,"featured_media":796157,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[64,79,266,94803,88924,97515,324844,324845,67,132,68],"class_list":["post-796156","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-inflation","tag-jeffrey-schmid","tag-kansas-city-fed","tag-kansas-city-federal-reserve","tag-remarkable-resilience","tag-tenth-district","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116573791095988802","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/796156","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=796156"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/796156\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/796157"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=796156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=796156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=796156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}