Kansas City Fed President Opposes Interest Rate Cut Amid Inflation Concerns
Jeff Schmid’s dissent from the Fed’s rate cut highlights persistent inflation above target and skepticism over easing policy amid strong market conditions.
Kansas City Federal Reserve President Jeff Schmid voted against this week’s 25 basis point rate cut, citing inflation remaining above the 2% target and questioning the need to ease conditions. In a Friday essay, he pointed to record stock prices, narrow corporate bond spreads, and strong high-yield issuance as signals of resilient markets, while noting inflation has stalled above target for years. Schmid also attributed labor market weakness to structural changes outside monetary policy’s influence. His comments briefly pulled bitcoin below $110,000 and trimmed Nasdaq futures gains. Rate traders now see a 66% chance of a December cut, down from 95% before remarks by Fed Chair Jerome Powell and Schmid.
- Federal Reserve (Fed): The central bank of the United States, responsible for setting monetary policy, including interest rates.
- Inflation Target: A central bank’s long-term goal for the annual rate of inflation, often used to guide monetary policy; the Fed’s target is 2%.