Kansas City Fed's Schmid: Food Prices Should Be Included in Core Inflation
Miles Bennett
Kansas City Fed President Jeffrey Schmid openly argued for adding food prices back into core inflation, signaling a direct challenge to a decades-old framework the Fed uses to set interest rates.
What exactly did Schmid say?
Schmid's words: "It's time to stop excluding food prices from core inflation."
He added that he "still believes this is the right thing to do" — not an off-the-cuff remark, but a deliberate, repeated position.
Why has core inflation always excluded food?
Core inflation — the inflation reading that strips out food and energy — is the Fed's key reference for setting interest rates.
The logic: food and energy prices swing sharply in the short term, masking the underlying price trend.
In plain terms = it is like taking a temperature reading while filtering out the occasional sneeze, so you only see a sustained fever.
What does this mean for Fed policy?
This means → if food prices were folded back in, the core inflation reading would likely run higher, raising the bar for rate cuts.
Schmid's stance is a personal view, not a Fed consensus — but it openly challenges a framework that has gone unquestioned for decades.
This reflects a surfacing disagreement inside the Fed over a foundational question: what actually counts as inflation.
Content is for reference only, not financial advice.