Latest news with #JeffreySchmid
Yahoo
4 days ago
- Business
- Yahoo
Fed's current monetary policy stance is 'exactly where we want to be,' official says
A member of the Federal Reserve panel that makes decisions about monetary policy said that he favors keeping interest rates at their current level to prevent strong levels of economic activity spurring a resurgence of inflation. Federal Reserve Bank of Kansas City President Jeffrey Schmid said that, in his view of the economy, growth is solid and inflation is still elevated relative to the Fed's 2% target – so monetary policy should remain modestly restrictive. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership "While monetary policy might currently be restrictive, it is not very restrictive. Given recent price pressures, a modestly restrictive stance is exactly where we want to be," he said. Schmid said that the Fed is "as close to meeting our dual mandate objectives of price stability and full employment as we have been for quite some time," adding that it "suggests to me that the stance of monetary policy is not far from neutral… With stock prices near record highs and bond spreads near record lows, I see little evidence of a highly restrictive monetary policy." Fed Governor Maintains Outlook For Three Interest Rate Cuts In 2025 The Fed has held its benchmark federal funds rate at a range of 4.25% to 4.5% at all five of its meetings this year with inflation above the central bank's goal and uncertainty over how tariffs will impact consumer prices. Read On The Fox Business App The latest inflation from the consumer price index (CPI) was 2.7% in July, while the Fed's preferred personal consumption expenditures (PCE) index was at 2.6% in June. Inflation Cools Slightly In July From Prior Month Schmid said that he is "anticipating a relatively muted effect of tariffs on inflation, but I view that as a sign that policy is appropriately calibrated rather than a sign that the policy rate should be cut." "Importantly, I would not characterize my view on tariffs and inflation as 'wait-and-see.' As I've said earlier this summer, I am not confident that we will ever be able to identify the exact (or even general) contribution of tariffs to inflation, given the complexity of the problem," he said. Schmid said that the complexity of determining how tariff costs are borne between foreign exporters, U.S.-based importers, firms in the domestic supply chain, retailers and ultimately consumers makes it unlikely there will be clarity in the near-term. He added that he doesn't think it's worthwhile to distinguish between inflation and tariff costs. Trump Administration Official Says Wall Street Tariff Inflation Fears Like 'Waiting For Godot' "I see no possibility that we will know the effect of the tariffs on prices, either as a one-off shock to the price level or a persistent inflation impetus, over the next few months. Also, I promise that you will not hear me talking about inflation excluding tariffs, which I think is neither a meaningful nor a measurable concept," he said. Schmid is one of the 12 members of the Federal Open Market Committee (FOMC), which makes decisions about the Fed's monetary policy moves and will next vote on rate cuts at its mid-September meeting. At the Fed's last meeting, Governors Michelle Bowman and Christopher Waller dissented from the decision to hold rates steady, arguing that a 25-basis-point cut would be appropriate to head off weakness in the labor market. It was the first dissent by two FOMC members in favor of rate cuts since 1993. Despite their dissent, the FOMC voted 9-2 to leave rates unchanged, with one member article source: Fed's current monetary policy stance is 'exactly where we want to be,' official says
Zawya
7 days ago
- Business
- Zawya
Fed's policy rate should stay on hold for now, Schmid says
The U.S. central bank should not take tariffs' muted effect on inflation so far as an opportunity to cut interest rates, but rather as a sign that monetary policy is "appropriately calibrated," Kansas City Federal Reserve President Jeffrey Schmid said on Tuesday, in remarks that contrast with the increasingly dovish tone of some of his colleagues. "With the economy still showing momentum, growing business optimism, and inflation still stuck above our objective, retaining a modestly restrictive monetary policy stance remains appropriate for the time being," Schmid said in remarks prepared for delivery to an economic development conference in Oklahoma. "While increased tariffs seem to be having a limited effect on inflation, I view this as a rationale for keeping policy on hold rather than an opportunity to ease the stance of policy." Schmid said his "patient approach" to changing the policy rate, currently in the 4.25%-4.50% range, shouldn't be seen as a "wait and see" approach because he does not think that it will be clear in the next few months whether tariffs are pushing up on prices temporarily or persistently. Rather, he said, he feels the current policy rate is not very far above the neutral rate, where activity is neither stimulated nor restrained, and the labor market is still looking solid despite a sharp drop in job growth in recent months. And while the cooling labor market is keeping a lid on the pass-through of tariffs into inflation, boosting demand aggressively could raise the risk of an outsized increase in price pressures, Schmid said. "In my view, and in discussion with my contacts, growth remains solid, inflation remains too high, and therefore policy should remain modestly restrictive," he said. "That said, as I stated earlier, inflation is determined by the balance of supply and demand, and if I see indications that demand growth is weakening significantly, I will adjust my views accordingly." (Reporting by Ann Saphir; Editing by Paul Simao)
Yahoo
7 days ago
- Business
- Yahoo
Fed's policy rate should stay on hold for now, Schmid says
(Reuters) -The U.S. central bank should not take tariffs' muted effect on inflation so far as an opportunity to cut interest rates, but rather as a sign that monetary policy is "appropriately calibrated," Kansas City Federal Reserve President Jeffrey Schmid said on Tuesday, in remarks that contrast with the increasingly dovish tone of some of his colleagues. "With the economy still showing momentum, growing business optimism, and inflation still stuck above our objective, retaining a modestly restrictive monetary policy stance remains appropriate for the time being," Schmid said in remarks prepared for delivery to an economic development conference in Oklahoma. "While increased tariffs seem to be having a limited effect on inflation, I view this as a rationale for keeping policy on hold rather than an opportunity to ease the stance of policy." Schmid said his "patient approach" to changing the policy rate, currently in the 4.25%-4.50% range, shouldn't be seen as a "wait and see" approach because he does not think that it will be clear in the next few months whether tariffs are pushing up on prices temporarily or persistently. Rather, he said, he feels the current policy rate is not very far above the neutral rate, where activity is neither stimulated nor restrained, and the labor market is still looking solid despite a sharp drop in job growth in recent months. And while the cooling labor market is keeping a lid on the pass-through of tariffs into inflation, boosting demand aggressively could raise the risk of an outsized increase in price pressures, Schmid said. "In my view, and in discussion with my contacts, growth remains solid, inflation remains too high, and therefore policy should remain modestly restrictive," he said. "That said, as I stated earlier, inflation is determined by the balance of supply and demand, and if I see indications that demand growth isweakening significantly, I will adjust my views accordingly." 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Reuters
7 days ago
- Business
- Reuters
Fed's policy rate should stay on hold for now, Schmid says
Aug 12 (Reuters) - The U.S. central bank should not take tariffs' muted effect on inflation so far as an opportunity to cut interest rates, but rather as a sign that monetary policy is "appropriately calibrated," Kansas City Federal Reserve President Jeffrey Schmid said on Tuesday, in remarks that contrast with the increasingly dovish tone of some of his colleagues. "With the economy still showing momentum, growing business optimism, and inflation still stuck above our objective, retaining a modestly restrictive monetary policy stance remains appropriate for the time being," Schmid said in remarks prepared for delivery to an economic development conference in Oklahoma. "While increased tariffs seem to be having a limited effect on inflation, I view this as a rationale for keeping policy on hold rather than an opportunity to ease the stance of policy." Schmid said his "patient approach" to changing the policy rate, currently in the 4.25%-4.50% range, shouldn't be seen as a "wait and see" approach because he does not think that it will be clear in the next few months whether tariffs are pushing up on prices temporarily or persistently. Rather, he said, he feels the current policy rate is not very far above the neutral rate, where activity is neither stimulated nor restrained, and the labor market is still looking solid despite a sharp drop in job growth in recent months. And while the cooling labor market is keeping a lid on the pass-through of tariffs into inflation, boosting demand aggressively could raise the risk of an outsized increase in price pressures, Schmid said. "In my view, and in discussion with my contacts, growth remains solid, inflation remains too high, and therefore policy should remain modestly restrictive," he said. "That said, as I stated earlier, inflation is determined by the balance of supply and demand, and if I see indications that demand growth is weakening significantly, I will adjust my views accordingly."
