{
  "id": 3746334,
  "title": "Fed’s Schmid warns energy shock is leaking into the economy",
  "url": "https://urgent.news/2026/08/27/feds-schmid-warns-energy-shock-is-leaking-into-the-economy",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-27T13:42:02.000Z",
  "source": {
    "name": "FXStreet",
    "slug": "fxstreet",
    "url": "https://www.fxstreet.com/news/feds-schmid-warns-energy-shock-is-leaking-into-the-economy-202608271342"
  },
  "original_language": "en",
  "account": "Kansas City Fed President Jeffrey Schmid expressed concern over the persistent inflation and the energy shock spreading throughout the economy. As the next Fed meeting draws near, Schmid emphasized the need for more information but reiterated the commitment to bring inflation back to 2%. The issue remains complex, as the reasons behind the current policy restrictions are unclear. The financial institution charges interest on loans to borrowers and pays interest to savers, which is influenced by base lending rates set by central banks based on economic changes. Central banks typically aim for price stability, often targeting a 2% core inflation rate. If inflation falls below the target, the central bank may lower base lending rates to stimulate lending and boost the economy. Conversely, if inflation rises significantly above 2%, the central bank typically raises base lending rates to curb inflation. Higher interest rates can strengthen a country's currency, as they make it more appealing for global investors to hold. This, in turn, puts downward pressure on the price of Gold, as it is priced in US Dollars and its appeal decreases when the currency is strong. The Fed funds rate, a critical indicator, is the overnight rate at which US banks lend to each other and is determined during Federal Reserve meetings. Market expectations for future Fed funds rate are monitored by the CME FedWatch tool, affecting the behavior of financial markets in anticipation of future policy decisions. The Federal Reserve's actions currently have the US Dollar in focus, with the currency expected to hold ground ahead of upcoming data releases and Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium. Gold has experienced a slight decline following its six-day low, hovering around $4,570 per troy ounce. Despite cautious market sentiment, other cryptocurrencies, such as Bitcoin and Ethereum, are showing signs of recovery, with Bitcoin nearing $80,000 and Ethereum surpassing $2,500. The Oil market, although more stable now, faces challenges with diesel fuel prices surging above $100 per barrel, a first-time record. Kevin Warsh, who will present his inaugural Jackson Hole speech as Federal Reserve Chair on Friday, is expected to discuss whether interest rates will be adjusted or remain unchanged in September.",
  "summary": "Kansas City Fed President Jeffrey Schmid warned that inflation remained stubborn and that the energy shock was spreading into the broader economy. With the next meeting approaching, he said the Fed needed more information but remained committed to returning inflation to 2%.",
  "key_points": [
    "Fed President Jeffrey Schmid warns energy shock is spreading through the economy",
    "Persistent inflation and energy shock pose challenges for central bank policy",
    "US Dollar expected to hold ground ahead of Federal Reserve Chair Jerome Powell's speech"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}