Three Federal Reserve officials used Thursday’s opening of the annual Jackson Hole economic symposium to warn that inflation remains too high, with at least one calling for a rate increase and others leaving the door open to one before year’s end. <\/p>\n
Kansas City Fed President Jeffrey Schmid, speaking on CNBC<\/a> from the Wyoming conference, described inflation as persistently resistant to the Fed’s efforts and warned that bringing it to heel would not be easy. Schmid also raised doubts about whether holding the policy rate at 3.5% to 3.75% is exerting any meaningful brake on economic activity. “I don’t know what we’re restricting currently with the rate policy that we’re at today,” he said. Asked whether he would back a hike at the Fed’s September 15-16 meeting, Schmid said he was still working to understand the demand-side forces behind current growth and price pressures before taking a stand. <\/p>\n Cleveland Fed President Beth Hammack was more pointed. She repeated her call for higher rates, saying inflation has run above the Fed’s 2% target for more than five years and that financial conditions show no signs of restriction. “I don’t want to prejudge anything. But I believe now is the time to act,” she said on CNBC. Hammack said her deeper worry is that a prolonged stretch of above-target inflation could cause households and businesses to simply accept higher prices as the new normal. She cited conversations with workers in Erie, Pennsylvania, who said they “can’t make ends meet” despite holding steady jobs. <\/p>\n Chicago Fed President Austan Goolsbee said the question of whether inflation has truly been tamed remains his most pressing worry at the moment. “Everybody should be on edge,” he said on the Rapid Response podcast. “If inflation starts going up again, it’s very hard to get rid of it.” Goolsbee cited elevated energy prices stemming from the Iran war and the back-and-forth on tariffs as additional burdens weighing on American families. He noted, however, that the recent three-month inflation trend “doesn’t look terrible” and said rate cuts could come eventually if inflation moves back toward 2%. <\/p>\n The remarks came a day after the government reported that the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, stood at 3.7% in the 12 months through July. Stripping out food and energy, the core reading climbed 3.3% over the past year. <\/p>\n