Federal Reserve's Schmid: Interest Rates "Have Been Properly Adjusted," Focus on Inflation Risks

ChainThink news, October 7, Kansas City Fed President Schmid said on Monday that he tends to not further cut interest rates, stating that when the Federal Reserve seeks to balance the dual risks of policy being too tight or too loose, it should continue to focus on the risk of inflation being too high. Schmid supported the Federal Reserve's decision in September to lower interest rates by 25 basis points, calling it appropriate risk management against the backdrop of a cooling labor market. However, he pointed out that various indicators show the overall job market remains healthy, while inflation remains too high, with service sector inflation stabilizing at around 3.5% over the past few months, far above the Federal Reserve's 2% inflation target.

"A worrying sign is that the range of price increases is also expanding," Schmid said, noting that nearly 80% of categories in official inflation statistics saw price increases as of August, up from 70% at the beginning of the year. He added, "Overall, I expect the impact of tariffs on inflation to be relatively mild, but I believe this indicates that the policy has been appropriately calibrated, rather than suggesting that the policy rate should be significantly reduced." (Jin10)