Kansas City Fed President Schmid said on the 18th that he supports the Federal Reserve's rate hike this week. He characterized the move as a first step toward curbing inflation, and said recent indicators suggest inflation is trending above 3%. "Our inflation problem is not just energy," he said, noting that inflation excluding energy has also remained elevated, with price increases across a broad range of goods and services that are inconsistent with the Fed's price stability goal. He did not, however, comment on the need for further rate hikes.
Schmid backs this week's Fed rate hike and flags inflation trending above 3%, implying a higher policy rate.
Hawkish Fed stance on above-3% inflation supports higher yields, pushing the 10Y yield up.
