Inflation Problem Isn't Only About Energy, Fed's Schmid Says

By Jessica Coacci

The inflation challenge facing policymakers isn't only about energy, according to Kansas City Fed President Jeff Schmid.

Measures of inflation that exclude energy are still running solidly above 2%, revealing an underlying trend in the data, Schmid said at the Federal Reserve Bank of Kansas City Agricultural Economic Summit in Omaha, Nebraska, on Tuesday.

Schmid isn't a voting member on the Federal Open Market Committee this year, but has repeatedly raised concerns about consistent price pressures and the importance of returning inflation back to the central bank's 2% target to preserve the Fed's credibility.

When discussing inflation supply shocks, Schmid said he is uncomfortable ever assuming that a burst of inflation will be temporary.

"Inflation shocks are not intrinsically transitory," he said, according to a published text of his remarks.

Schmid also said monetary policy works best when policymakers remain focused on aggregate price indexes and largely ignore the distribution of relative price changes occurring beneath the surface.

"The Fed, through its influence on demand, always has a role to play when it comes to keeping inflation in check, no matter the proximate cause of that inflation," he said.

Schmid added that the labor market is in balance, leaving his focus on price pressures.

Write to Jessica Coacci at jessica.coacci@wsj.com

(END) Dow Jones Newswires

August 04, 2026 20:29 ET (00:29 GMT)