Kansas City 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.
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