Fed's Schmid: uncomfortable with looking through tariff-driven price push

The comments show Schmid is likely inclined to hold the Fed policy rate steady not just at its upcoming June 17-18 meeting as is widely expected but for some time after that as well, to make sure that inflation, which is now near the Fed's 2% goal, doesn't get out of hand. "While theory might suggest that monetary policy should look through a one-time increase in prices, I would be uncomfortable staking the Fed’s reputation and credibility on theory," Schmid said in remarks prepared for delivery to a banking conference hosted at his regional Fed bank's headquarters. In response, he said, the Fed will "need to remain nimble" to balance its twin objectives of price stability and full employment.