Kansas City Federal Reserve President Jeffrey Schmid said the central bank's risks remain tilted toward inflation, while the labor market remains in balance.
Speaking at an event in Grand Island, Neb., Schmid said this week's inflation data showed an encouraging deceleration, but it would be premature to put too much weight on a single data point relative to recent trends.
With the price of oil rising again it is uncertain how persistent any relief on energy prices will be, Schmid said. Excluding energy, he added that services price inflation has been trending higher, remaining at a pace above the level consistent with the Fed's target.
Schmid said he disagrees with the analysis that monetary policy cannot heal supply chain disruptions.
"One of the enduring lessons of the pandemic is that inflation is never just an issue of supply alone," according to a published text of his remarks. "Strong demand is almost always a factor as well."
Schmid also said that it is time to stop excluding food prices from core inflation, as doing so does not meaningfully improve estimates of trend inflation.
"I am uncomfortable ever assuming that a burst of inflation is likely to be temporary," he said.
Write to Jessica Coacci at jessica.coacci@wsj.com
(END) Dow Jones Newswires
July 16, 2026 13:26 ET (17:26 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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