At an event overnight, Kansas City Fed President Jeff Schmid warned that price increases have become “more widespread”, with 80% of inflation categories rising, compared with 70% earlier this year. He called the trend “worrying,” indicating that underlying inflation pressures remain entrenched.
Schmid said he sees a “relatively muted effect” from tariffs on inflation, but viewed that as a signal that monetary policy is well positioned, not as evidence to justify “aggressively lowering” rates.
He added that the Fed faces difficult trade-offs between its dual mandates but insisted it “must maintain its credibility on inflation”.
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