Kansas City Federal Reserve Bank President Jeffrey Schmidt stopped short of calling for a rate hike Thursday, but said inflation remains too high.
Inflation has proven resilient, Schmidt said in an interview with CNBC at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming.
“It’s still stubborn, it’s still sticky, and… we have to keep finding ways to break through,” he said on “Squawk Box.” “As we move into the (Federal Open Market Committee) cycle, our work diminishes.”
The comments came a day after the Commerce Department reported that the Fed’s main inflation measure, core prices excluding food and energy, rose 3.3% from a year earlier, well above the central bank’s 2% target.
Schmidt said it was unclear whether the Fed’s current interest rate target of 3.5% to 3.75% was restrictive, given that the economy grew 1.5% in the second quarter and the unemployment rate remained at 4.1%.
“I don’t know what the current interest rate policy is restricting,” he said. “We know that changes in interest rates change market behavior at the macro level.”
Mr. Schmidt will not vote on the FOMC this year, but he can still voice his opinion at the meeting. He twice opposed interest rate cuts last year as a voter.
However, Schmidt said he was unsure whether he would support raising rates at this point.
“I think we need a little more information. What I’m trying to figure out is the demand side of what’s driving both growth and inflation,” Schmidt said.
Separately, Schmidt said he believed there was “some room” to consider reducing the number of FOMC meetings per year from the current eight to six, proposed in July by Chairman Kevin Warsh.
