Jeff Schmid, Kansas City Federal Reserve President, is reluctant to cut interest rates further due to the strength of the current economy and persistent inflation above 2%. The dual mandate of price stability and full employment is close to being fulfilled, indicating a need for neutral policy rather than further easing.
Schmid favors data-based policy changes instead of aggressive rate reductions. With ongoing balance sheet drawdowns, he aims to transition towards an all-Treasuries profile, minimizing impacts on asset prices. Despite a looser job market, he remains optimistic about solid economic growth at approximately 3% and stable employment.
Leave a Reply