At the USDA Ag Outlook Forum, Federal Reserve Bank of Kansas City President/CEO Jeff Schmid stressed caution in monetary policy. Schmid said the labor market is strong but expressed concern over inflation. He pointed to the lessons of past economic crises, particularly the challenges of the 1970s and 1980s when the Fed struggled to contain inflation. “Once inflation is embedded in expectations, it becomes much more painful to vanquish. It took more than just easing economic tightness to bring down inflation in the 1980s. It took the Fed building credibility and inflation fighter credibility that came at a cost of steep increase in unemployment and severe recessions.”
