Kansas City Federal Reserve Bank President Jeffrey Schmid, speaking with the Kansas Bankers Association's annual meeting in Colorado Springs, Colorado:
- 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.
- Path of Fed policy will be determined by data, and strength of economy.
- Would not want to assume any particular path or endpoint for policy rate.
Schmid favours a more hawkish outlook than many of his colleagues, but he sounds middle-of-the-road here.
He is highlighting the next data point coming, CPI next week:
Fed's Schmid
