Kansas City Fed President Jeffrey Schmid said the Fed’s 25 bps cut last week was a “reasonable risk-management strategy” in light of signs that the labor market could weaken more abruptly than anticipated.
Yet, Schmid acknowledged that inflation remains “too high,” even as the labor market, while cooling, remains “largely in balance.” He argued that moving policy to an “only slightly restrictive” level is the right place for now, offering support for employment while still leaning against inflation.
He declined to signal where he sees policy heading, saying he will stay “data-dependent” in weighing any further moves.
