Jeffrey Schmid, President of the Federal Reserve (Fed) Bank of Kansas City, said on Thursday that inflation remains the primary threat to the US economy, while raising questions about whether the Fed may need to keep interest rates elevated or even tighten policy further to ensure price stability.

Speaking during a fireside chat at the Bank of Kansas City Economic Forum, Schmid noted that recent economic data continues to point to a resilient economy.

Key takeaways

Data suggests the economy is doing well.

Inflation is too high; it has been a five-year fight and the Fed is still trying to figure it out.

Most of the higher prices people are paying for energy are staying in the US economy.

The big question for oil is how long prices stay high, and that is a political decision.

The biggest risk facing the economy right now is inflation.

The big question now is whether the Fed should stay patient on rates.

The issue is whether the Fed needs to raise rates to 'tamp this thing down' and meet the inflation target.

The 2% target is easy to communicate, and the Fed should not blur the message around that."