施密德周二在奥马哈商会发表了讲话，他表示：“降息的决定反映了对通胀正迈向美联储2%目标的信心日益增强，这种信心部分源于近期劳动力市场和产品市场均趋于平衡的迹象。”1. Kansas City Fed President Schmied indicated that while the Fed's initial rate cut reflects confidence in curbing inflation, it is still uncertain to what extent rates will be lowered; 2. Within the Federal Open Market Committee (FOMC), Schmied's stance is hawkish, but he will not have a vote on monetary policy until next year.
On Tuesday (November 19th) local time, Kansas Fed President Shmid stated that although the Fed's initial rate cut reflected confidence in easing inflation, it is currently uncertain to what extent rates will be reduced.
The Fed lowered rates by 50 basis points and 25 basis points in the September and November rate meetings, respectively, and the target range for the federal funds rate has been adjusted to 4.5%-4.75%.
Schmied spoke at the Omaha Chamber of Commerce on Tuesday, stating, "The decision to cut rates reflects an increasing confidence that inflation is moving toward the Fed's 2% target, and this confidence partly stems from recent signs of balance in both the labor market and product market."
Schmied mentioned that while heading towards the 2% target means it is an appropriate time to cut rates, "it remains to be seen how much lower rates will go or what level they will ultimately reach."
Within the Federal Open Market Committee (FOMC), Schmied's stance is hawkish, but he will not have a vote on monetary policy until next year.
The Fed's next meeting is scheduled for December 17-18. The Chicago Mercantile Exchange's FedWatch tool shows that traders currently bet on a 55.5% probability that policymakers will cut rates by 25 basis points in December, while the probability of no rate cut is 44.5%.
Schmied did not mention in his speech whether he supports a 25 basis point cut in December, as his remarks mainly focused on issues such as demographic changes and productivity, factors that could alter the fundamental dynamics of inflation and, in turn, impact monetary policy in the long term.
Regarding the current federal government spending issues, Schmid stated that large fiscal deficits will not trigger inflation, as the Federal Reserve will do everything possible to keep inflation at the target level of 2%.
However, he also warned that this might mean that "interest rates will remain high for a long time," and therefore, it is crucial for the Federal Reserve to maintain independence in formulating monetary policy.
Schmid said, "Government decision-makers will likely want to avoid deficits leading to rising interest rates, but history shows that adhering to this impulse often leads to increased inflation."
Editor/Rocky
