Fed's Schmid calls for tighter monetary policy to tamp down on 'too high' inflation

The official, who does not currently have a vote on the interest-rate-setting Federal Open Market Committee, did not say when or by how much he’d like the Fed to raise rates.

Schmid’s remarks were his first since last week’s FOMC meeting. Then, officials voted in favor of keeping the federal funds target rate range steady at between 3.5% and 3.75% amid long-running worries that inflation is too high.

Three Fed officials voted in favor of a hike, to quell price pressures, and other officials who’ve spoken over recent days have signaled an openness to raising rates depending on what happens with the economy.

Markets are expecting tighter monetary policy. But the challenge for investors and traders is that new Fed Chairman Kevin Warsh is declining to provide any guidance about what he thinks should happen with interest rate policy, and has been very light on the details of how he thinks about setting rate policy.