Federal Reserve officials warn about inflation at Jackson Hole conference

Federal Reserve officials warned Thursday that US inflation remains too high, keeping the possibility of further rate hikes in focus as policymakers gathered for the annual Jackson Hole symposium.

Kansas City Fed President Jeffrey Schmid said inflation remains “stubborn” and “sticky,” adding that the current federal funds rate of 3.50% to 3.75% does not appear restrictive enough to bring price pressures back toward the Fed’s 2% target.

Schmid, who has recently supported tighter monetary policy, said he needs more information before deciding whether to back a rate increase at the Fed’s Sept. 15 to 16 meeting.

Cleveland Fed President Beth Hammack also reiterated concerns about inflation, saying she believes “now is the time to act.” Hammack was one of three officials who dissented at the Fed’s July meeting in favor of raising rates.

She warned that persistently elevated inflation could begin changing consumer and business expectations, potentially making price pressures harder to contain.

Chicago Fed President Austan Goolsbee similarly said his biggest near term concern is that inflation remains uncontrolled. He pointed to higher energy costs linked to the war in Iran and shifting US tariff policy as additional pressures on households.

The comments came after the Fed’s preferred inflation gauge showed prices rising 3.7% year over year in July, unchanged from June but below the 4.1% pace recorded in May.

Futures markets currently lean against a September rate increase but indicate stronger expectations for additional tightening before the end of 2026.

Attention now turns to Fed Chair Kevin Warsh, who is scheduled to speak Friday at Jackson Hole for potential clues on the direction of monetary policy.