Kansas City Fed President Jeff Schmid acknowledged that while inflation is nearing the Fed’s 2% target, currently at around 2.5%, “we are still not quite there.”
Nevertheless, “if inflation continues to come in low, my confidence will grow that we are on track to meet the price stability part of our mandate, and it will be appropriate to adjust the stance of policy,” Schmid said at a bankers’ event overnight.
Despite fears sparked by a weak jobs report, Schmid pushed back against the notion that Fed would need to take aggressive action to avoid a recession. He described the economy as resilient, with strong consumer demand and a labor market that, although cooling, remains “quite healthy.”
Schmid noted that Fed’s current policy stance “is not that restrictive” and suggested that further cooling in the labor market may be necessary to achieve additional declines in inflation.
