Kansas City Fed president Jeff Schmid said he saw the bank’s current interest rate policy as being only modestly restrictive (Jim WATSON) <\/p>\n
A senior member of the US Federal Reserve on Friday said he voted against cutting interest rates this week because inflation was “too high” for comfort.<\/p>\n
Kansas City Fed president Jeff Schmid was one of two people who dissented on Wednesday’s vote, at which the US central bank backed a quarter percentage-point rate cut.<\/p>\n
The other dissent was Fed governor Stephen Miran, who wanted a larger rate cut.<\/p>\n
“The labor market is largely in balance, the economy shows continued momentum, and inflation remains too high,” Schmid said in a statement.<\/p>\n
“I view the stance of policy as only modestly restrictive,” added Schmid, who has a vote on the Fed’s rate-setting committee this year. “In this context, I judged it appropriate to maintain the policy rate at this week’s meeting.”<\/p>\n
US consumer inflation data came in hot at 3.0 percent in the 12 months to September, though the Fed uses a different measure that is also stuck above the two-percent target.<\/p>\n
The Fed’s rate decision brought interest rates down to between 3.75 percent and 4.00 percent, easing the burden slightly on businesses and consumers looking to borrow money.<\/p>\n
Speaking to reporters on Wednesday after the decision was published, Fed chair Jerome Powell said that while there had been broad agreement on a cut this time, there was less clarity on what would happen next.<\/p>\n
“There were strongly differing views about how to proceed in December,” he said. “A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.”<\/p>\n
Speaking in Washington on Friday, President Donald Trump’s top economic advisor sounded a different note on the health of the world’s largest economy, flagging the recent consumer inflation data which came in slightly below expectations.<\/p>\n
“We’re glad that they reduced the interest rate,” Kevin Hassett, the director of Trump’s National Economic Council, told reporters.<\/p>\n
“The Fed is flying blind a little bit, but we have a government shutdown, which is a negative for the economy,” he said.<\/p>\n
“And against that backdrop, the idea that the Fed would be backing away from their promised rate reductions in the future is puzzling to us.”<\/p>\n
Among the 10-2 majority voting for a quarter-point cut this week was Fed governor Christopher Waller, a Trump nominee who is on the five-person shortlist to take over from Powell when he steps down as Fed chair next May.<\/p>\n
“All of our forecasts have inflation coming back down the target,” he told Larry Kudlow on Fox Business on Friday.<\/p>\n
“Yes, it’s high, it’s been high, but it’s fully coming back. And the biggest concern we have right now is the labor market,” he said.<\/p>\n
“So this is why I’m still advocating we cut policy rates in December, because that’s what all the data is telling me to do.”<\/p>\n
Futures traders slashed their expectations of a December rate cut, and now see only a 65 percent probability of a quarter-point move in December, according to CME Group data.<\/p>\n
da\/bgs<\/p>\n","protected":false},"excerpt":{"rendered":"Kansas City Fed president Jeff Schmid said he saw the bank’s current interest rate policy as being only…\n","protected":false},"author":2,"featured_media":156167,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,179,18,19,21934,17,91136,10595,16332],"class_list":{"0":"post-156166","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-eire","11":"tag-ie","12":"tag-interest-rate","13":"tag-ireland","14":"tag-kansas-city-fed-president-jeff-schmid","15":"tag-president-donald-trump","16":"tag-us-federal-reserve"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115471437295024258","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/156166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=156166"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/156166\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/156167"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=156166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=156166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=156166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}