Why does Fed's Schmid reject the idea that the current oil price surge is 'transitory'?

Schmid rejects the 'transitory' label because inflation is 'too hot and has been above target for too long,' making it harder to assume the energy shock will have only a temporary impact on pricing; he explicitly states, 'I place little stock in assuming that the most recent runup in prices is transitory within an acceptable time horizon,' and emphasizes that his policy focus remains squarely on inflation.

What does Schmid say about U.S. energy producers' response to higher oil prices?

Schmid reports that U.S. energy firms are exercising caution and not increasing oil production despite higher prices, citing 'a high degree of caution' among regional firms and noting they have adopted 'far greater capital discipline' over the past decade and remain 'reluctant to increase production while prices remain so uncertain.'

Fed's Schmid warns against viewing oil shock as transitory

May 29, 2026

Federal Reserve President Schmid warned that inflation concerns persist due to energy shocks, noting U.S. energy producers remain cautious about increasing oil output despite higher prices.

reuters

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