Fed Officials Gathered in Jackson Hole Warn in Unison About Inflation

[Financial News] Federal Reserve System (FRS) bank presidents who gathered for the Jackson Hole Economic Policy Symposium issued a warning about the recent rise in U.S. inflation. However, they were split on whether interest rates should be raised to bring prices under control.
The Federal Reserve Bank of Kansas City hosted the Fed's annual economic symposium, the Jackson Hole Economic Policy Symposium, in Jackson Hole, Wyoming, from Aug. 27 to 29 local time. Fed Chair Kevin Warsh will deliver the opening keynote at 11 p.m. on Aug. 28 Korea time.
Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, said in an interview with CNBC on Aug. 27 that "inflation remains stubborn and sticky" and that "we need to keep looking for ways to break through it." He also questioned whether the Fed's current benchmark rate of 3.5% to 3.75% is restrictive enough to slow the economy.
Schmid said, "I don't know what we are constraining with the current interest rate policy." Asked whether he supported a rate hike, he replied, "I need a little more information," adding that he was trying to identify demand-side factors driving both growth and inflation.
Beth Hammack, president of the Federal Reserve Bank of Cleveland, told CNBC, "I don't want to prejudge anything, but I think it's time to act."
She was one of three officials who dissented at last month's Federal Open Market Committee (FOMC) meeting, arguing for a rate hike instead of holding rates steady.
Hammack said inflation has remained above the Fed's 2% target for more than five years and argued that current monetary policy is not restraining the economy. She added, "The idea that inflation will persist is beginning to take hold in parts of the economy. I don't think we are there yet, but I definitely want to avoid that situation."
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said on the "Rapid Response" podcast that "everyone should be on guard," adding that his biggest short-term concern is that inflation is still not under control.
He said the inflation trend over the past three months "doesn't look that bad" and added that if there is clear evidence that inflation is moving toward the Fed's 2% target, rates could be lowered gradually over time.
Susan Collins, president of the Federal Reserve Bank of Boston, took a cautious stance in an interview on Aug. 27, describing recent inflation data as "mixed." She said monetary policy is "slightly restrictive" and identified a gradual slowdown in inflation as the most likely scenario.
The U.S. Personal Consumption Expenditures Price Index (PCE Price Index) for July, released the previous day, rose 3.7% from a year earlier, topping the market forecast of 3.6%. The core PCE also held steady at 3.3% from the previous month. The index is widely used by the Fed to gauge inflation.
[email protected] Park Jong-won Reporter