Two Federal Reserve officials on Thursday shared ongoing concerns about the U.S. inflation outlook as central bankers gathered in Jackson Hole, Wyoming for the Kansas City Fed's annual economic symposium. Kansas City Fed President Jeffrey Schmid said inflation is "still stubborn and it's still sticky" and that the current 3.50%-3.75% policy rate does not appear restrictive, suggesting he might still favor rate hikes. Chicago Fed President Austan Goolsbee described the environment of above-target inflation as partly "disturbing," saying his biggest fear is that inflation is not under control, and he noted risks from energy costs tied to the war in Iran and tariff oscillations. Schmid and Goolsbee spoke a day after the government reported that the Personal Consumption Expenditures Price Index stood at 3.7% in the 12 months through July, matching June but down from 4.1% in May. Fed Chairman Kevin Warsh is slated to speak on Friday, with expectations tempered by his opposition to forward guidance.
Fed officials signal inflation sticky, possibly favoring rate hikes, which would raise the policy rate.
Hawkish Fed comments suggest higher rates, pressuring bond prices and pushing yields up.
