Schmid is a known hawk and doesn't vote until 2028 so his comments don't carry too much weight:
- Can't be complacent about inflation expectations
- Fed must follow through with policy action to validate medium-term and long-term expectations
- Can't assume oil price inflation will be transitory
- Higher energy prices will increase inflation, including core inflation
- US economic resilience should not be underestimated
- Expected modest drag from sustained higher oil prices
For a hawk, this isn't exactly screaming from the rooftops and it's why the market has reversed course after briefly pricing in rate hikes. Pricing now shows about a 30% chance of a single cut by December.
