Two Federal Reserve officials lean towards US interest-rate hike at Jackson Hole meeting

Two Federal Reserve officials said the US central bank's interest-rate setting is not restraining the US economy at a time when inflation continues to run above its 2pc target, urging their peers to act soon to cool price pressures. 'For me, I think it might be accommodative on the short end,' Kansas City Fed president Jeff Schmid told Bloomberg Television in an interview in Jackson Hole, Wyoming. 'So we've got work to do.' Economists are divided over whether the Fed will need to raise interest rates over coming months in a bid to tame inflation. The latest price data, released on Wednesday, showed the Fed's preferred gauge of inflation rose 3.7pc in the year through to the end of July. At their July meeting, policymakers voted to hold the benchmark federal funds rate in a range of 3.5pc to 3.75pc. Minutes of the gathering showed several officials, including non-voters, favoured an interest-rate increase, and many others indicated that policy tightening would be necessary if inflation didn't decline. 'There were some of my colleagues who dissented at the last meeting, so I would probably put myself in that camp,' Mr Schmid said. He spoke on the eve of the Fed's flagship annual conference in Grand Teton National Park. Investors will be watching closely when Fed chairman Kevin Warsh delivers a keynote speech on Friday. Cleveland Fed president Beth Hammack, one of the officials who dissented against last month's rate decision, reiterated on Thursday that policymakers should act now to contain inflation because rates are not slowing the economy enough for price pressures to cool on their own. 'I think it's appropriate for us to put some restraint there to help bring inflation back down to target,' Ms Hammack said in an interview with CNBC. 'The longer inflation stays above our objective, the harder it will be for us to bring it back down.' Policymakers next meet on September 15-16, then in late October just before the mid-term elections. Mr Schmid said he didn't believe the election would affect decision-making. 'We get in that room, we are able to speak our truth about what we think the economy is doing, and I just don't think it enters into the equation,' he said of the election. 'It certainly doesn't enter into my equation.' The Kansas City Fed chief also pushed back against views that the central bank's credibility has taken a hit after chairman Kevin Warsh's shaky press conference in July contributed to a bond market rebuke. 'Well, for me, I just don't see it,' Mr Schmid said.