Fed's Schmid: Lower rates would be appropriate if inflation continues to fall

FXStreetAug 9, 2024 12:35 AM

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Federal Reserve Bank of Kansas City Jeffrey Schmid said on Thursday that lowering monetary policy would be "appropriate" should inflation continue to come in low.

Key quotes

If inflation continues to come in low, it will be appropriate to adjust policy.
Current stance of Fed policy is 'not that restrictive.'
Financial conditions can impact real economy, but Fed must remain focused on dual mandate.
Fed is close but 'still not quite there' on reaching 2% inflation goal.
More confident that inflation is on path to target, given recent 'encouraging' inflation data.
Price data is volatile, should look for the worst in the data rather than the best.
Has been 'noticeable cooling' of labor market, but overall it still appears healthy.
Cooling labor market is a necessary condition for easing inflation.
The story could change if conditions were to weaken considerably.
The path of Fed policy will be determined by data and strength of the economy.
Would not want to assume any particular path or endpoint for policy rate.

Market reaction

The US Dollar Index (DXY) is trading 0.07% higher on the day at 103.28, as of writing.

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