Kansas City Fed President Jeffrey Schmid, in a CNBC interview, stressed there was no urgency to cut rates. With inflation still hovering closer to 3% than 2% and the labor market in solid shape, Schmid said policymakers would need “very definitive data” before adjusting policy.
He argued that the “last mile” of returning inflation to target remains the hardest part and warned that lowering rates too soon could undermine public expectations, reigniting price pressures. “We got to be careful about what lowering short-term rates would do to the inflation mentality,” he noted.
Despite weaker jobs data in recent months, Schmid emphasized optimism among business contacts and questioned whether the current 4.25%–4.50% policy rate was significantly restricting growth. “I don’t know exactly what we are restricting,” he said.
