The President of the Federal Reserve Bank of Kansas City, Jeffrey Schmid, has raised concerns that the ongoing energy shock may not be as short-lived as expected, considering the existing high inflation rates.
During a conference in Iceland on Friday, Schmid expressed, "My primary concern is inflation, which is too hot and has been above target for too long." He further emphasized his skepticism about the recent price surge being "transitory" within an acceptable time frame, reported Reuters.
"Now is not the time to let down our guard, given how long inflation has been above the central bank's 2% target," Schmid added.
The Kansas Fed President noted that despite the U.S.'s reduced susceptibility to energy shocks compared to the past, higher gasoline prices still affect consumer spending.
He also highlighted that U.S. energy firms are leaning towards greater capital discipline and are reluctant to boost oil production due to price uncertainties.
