Fed’s Schmid Warns Rate Cuts May Not Address Labor Market Structural Issues
Kansas City Fed President Jeff Schmid argues that further interest rate cuts are unlikely to resolve structural challenges in the labor market, citing technological changes and immigration policy as key factors. Schmid's comments come amid ongoing debates about the Fed's monetary policy direction.
Schmid also cautioned that additional rate reductions could prolong inflationary pressures, potentially pushing the Fed further from its 2% target. He identified rising electricity and healthcare costs as contributors to inflation, alongside the TRUMP administration's tariffs.
The dissenting voice in October's FOMC meeting, Schmid favored maintaining current rates. Market participants now await the Fed's next decision on December 10, which could have significant implications for financial markets.
