Lates News

Federal Reserve's Schmid warned on Tuesday that energy price increases should not be seen as having only a short-term impact on inflation, as even before the Iran war led to soaring oil prices, the inflation rate was already close to 3% and the progress of the Federal Reserve in achieving its 2% inflation target had stalled. Schmid said, "I think we cannot take lightly the risks facing inflation expectations." He also pointed out that although most indicators measuring medium to long-term inflation expectations have remained stable, this has not brought him much comfort. "Now our task is to take appropriate policy actions to confirm these expectations." Schmid did not specifically mention what specific policy measures he was referring to, but last year he voted against the Fed's decision to lower interest rates twice. Last week, financial markets reflected the increasing belief among investors that rising oil prices could force the Federal Reserve to raise rates later this year to prevent inflation. However, this week the market view has shifted to the belief that the Federal Reserve will keep rates unchanged.