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Kansas City Fed President Rejects Rate Hike as Inflation Stubborn

8/28/2026

43 5 Full Breakdown

Summary

Story summary

Kansas City Fed President Jeffrey Schmid said inflation remains stubborn, withholding support for a rate hike.
Core PCE price index rose 3.3% year-over-year, above the Fed’s 2% target.
July headline PCE increased 0.2% and was up 3.7% year-over-year.
The July FOMC voted 9-3 to keep rates at 3.5%-3.75% while three presidents dissented.
Schmid suggested cutting FOMC meetings from eight to six per year.

History

Historical Context

In 1979 President Carter appointed Paul Volcker as Fed chairman to curb inflation that had hit 11.3% that year. Volcker’s tightening pushed the federal funds rate to a 20% peak in June 1981, pulling CPI down from a 13.5% high in 1980. Today Kansas City Fed President Jeffrey Schmid notes a 3.3% PCE and a 9-3 vote keeping rates near 3.75%, echoing Volcker’s approach.

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Story summary

Kansas City Fed President Jeffrey Schmid said inflation remains stubborn, withholding support for a rate hike.
Core PCE price index rose 3.3% year-over-year, above the Fed’s 2% target.
July headline PCE increased 0.2% and was up 3.7% year-over-year.
The July FOMC voted 9-3 to keep rates at 3.5%-3.75% while three presidents dissented.
Schmid suggested cutting FOMC meetings from eight to six per year.

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