Fed’s Schmid Favors Slower Pace for Interest-Rate Reductions
- Says labor market normalizing, inflation headed for 2%
- KC Fed chief says caution will lessen market volatility
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Federal Reserve Bank of Kansas City President Jeffrey Schmid said he favors a slower pace of interest-rate reductions given uncertainty about how low the US central bank should ultimately cut rates.
Schmid, in his first public remarks since August, said he hoped for a “more normalized” policy cycle where the Fed makes “modest” adjustments to sustain economic growth, stable prices and full employment. He said a slower pace of rate reductions will also allow the Fed to find a so-called neutral level — where policy neither weighs on nor stimulates the economy.