Kansas City Fed President Advocates Against Further Rate Cuts Amid Inflation Concerns

According to BlockBeats, Kansas City Federal Reserve President Schmid expressed his preference against further interest rate cuts, emphasizing the need to focus on the risks of high inflation as the Federal Reserve seeks a balance between overly tight and overly loose policies. Schmid supported the Fed's decision in September to lower rates by 25 basis points, considering it appropriate risk management amid a cooling labor market. However, he noted that various indicators show the overall employment market remains healthy, while inflation continues to be elevated, with service sector inflation stabilizing around 3.5% in recent months, significantly above the Fed's 2% target. Schmid highlighted a concerning trend of broadening price increases, pointing out that as of August, nearly 80% of categories in official inflation statistics experienced price hikes, up from 70% at the beginning of the year. He added that while he expects the impact of tariffs on inflation to be relatively mild, he believes this indicates that policy is appropriately calibrated rather than suggesting a significant reduction in policy rates.