Kansas City Fed president: "Further rate cuts could harm inflation"

JH Kim

Summary

Jeff Schmid, president of the Federal Reserve Bank of Kansas City, warned that additional rate cuts could have a negative impact on price stability.
Schmid said there is insufficient basis for additional easing measures to resolve fissures in the labor market.
He said expectations of early rate cuts could set back efforts to achieve price stability.

Jeff Schmid, president of the Federal Reserve Bank of Kansas City, warned that additional rate cuts could negatively affect price stability. He said there is also insufficient basis to resolve fissures in the labor market.

On the 14th (local time), according to economic breaking news channel Walter Bloomberg, Schmid said, "Additional rate cuts would not only fail to fill the fissures in the labor market but would risk re-igniting inflation." He emphasized that, given the Fed's price stability goal, excessive easing policies should be approached with caution.

Recently, markets have increasingly expected the Fed could accelerate the pace of rate cuts due to an economic slowdown and rising unemployment. However, Schmid warned that if such expectations lead to early easing, efforts to achieve price stability could instead be set back.