Kansas City Federal Reserve (Fed) President Jeffrey Schmid said on Tuesday that the muted impact of tariffs on inflation should be seen as evidence that monetary policy is “appropriately calibrated,” not as a reason to cut interest rates.
Key Quotes
- Retaining a modestly restrictive policy stance is appropriate for now.
- Supports a patient approach to changing the Fed’s policy rate.
- Says the policy rate is not far from neutral, but inflation remains too high.
- Notes that tariffs’ limited effect on inflation is a reason to keep policy on hold, not to cut rates.
- Adds that the likely muted impact of tariffs on inflation suggests policy is appropriately calibrated.
- Sees no chance of knowing the full effect of tariffs on prices in the next few months.
- Will adjust views if there are signs of significant weakening in demand growth.