According to Jeffrey Schmid, services inflation is about 3.5%, with roughly 80% of categories rising as of August. He said tariffs’ inflation impact should be modest and policy does not warrant large cuts.
Kansas City Fed President Jeffrey Schmid said he prefers not to cut rates further, while supporting the Federal Reserve’s 25-basis-point reduction in September as appropriate risk management amid a cooling labor market. He said inflation remains too high, citing services inflation around 3.5% and nearly 80% of categories showing price increases in August, up from about 70% at the start of the year. Schmid added that tariff effects on inflation should be modest and argued policy is appropriately calibrated, not warranting large cuts.