Kansas City Fed’s Schmid Says Inflation Still Too High as Rate-Cut Timing in Doubt

Jeff Schmid, president of the Federal Reserve Bank of Kansas City, said US inflation remains too high, reinforcing market expectations that the Federal Reserve could delay interest-rate cuts.

Walter Bloomberg reported on June 4 that Schmid said "inflation is still too high" and that the Fed is still working to solve the problem after fighting it for the past five years.

He added that, while inflation has slowed after peaking, it is too early to say price growth has durably returned to the Fed’s 2% target.

The comments came after the International Monetary Fund recently identified higher tariffs and rising energy prices as upside risks to inflation.

Within the Fed, concerns have emerged that higher energy prices stemming from the recent Middle East conflict, along with the effects of tariff policy, could complicate the path to price stability.

Markets are watching for the possibility that monetary policy will remain restrictive for longer than previously expected as Fed officials continue to sound warnings on inflation.