Fed's Schmid Advocates Caution as Inflation Nears Target

Federal Reserve Bank of Kansas City President Jeffrey Schmid expressed cautious optimism about inflation nearing the Fed’s 2% target but emphasized that further data is needed before supporting interest rate cuts. Despite a recent rise in unemployment, Schmid noted that the labor market remains healthy, and he underscored the importance of data-driven policy decisions. While the Fed maintained its current interest rates, Schmid suggested that future rate cuts could be possible if inflation continues to decline. However, he stressed the need for vigilance due to past inflation shocks and the importance of balancing inflation control with employment stability.