Fed’s Schmid Says Restrictive Rates Needed to Cool Inflation

Federal Reserve Bank of Kansas City President Jeff Schmid said the US central bank should hold rates at a “somewhat restrictive” level, as he expressed continued concerns over inflation that remains too high.

“In my view, further rate cuts risk allowing high inflation to persist even longer,” Schmid said Wednesday in prepared remarks for an event in Albuquerque, New Mexico.

He added that interest rates should still be putting some pressure on the economy, but that may not be the case.

Kansas City Fed President Jeffrey Schmid

Photographer: David Paul Morris/Bloomberg

“With growth showing momentum and inflation still hot, I’m not seeing many indications of economic restraint,” Schmid said. ...