Fed's Jeff Schmid says U.S. rates must rise further

Jeff Schmid, president of the Federal Reserve Bank of Kansas City, told an event in Omaha on August 5 that the current policy stance is not sufficiently restrictive. He said strong consumer spending and investment, together with persistent inflation above the Fed’s 2 % target, require a tighter stance and likely additional rate hikes.

Schmid noted that recent price pressures stem from higher energy costs linked to the Iran conflict and a surge in AI‑driven investment, which keep demand robust. At the Fed’s last policy meeting the benchmark rate was left unchanged, but three members of the Federal Open Market Committee voted to raise it by a quarter point, warning that delaying action could force a larger move later. On the same day, Philadelphia Fed president Anna Paulson said she remains open to further adjustments depending on inflation developments.