According to BlockBeats, Schmid, the president of the Federal Reserve Bank of Kansas City, expressed his preference not to make further cuts to interest rates, emphasizing the need to focus on the risks of rising inflation, as the Federal Reserve seeks to strike a balance between very tight policies and very lenient policies. Schmid supported the Federal Reserve's decision in September to lower interest rates by 25 basis points, considering it an appropriate measure to manage risks amid a slowing labor market. However, he noted that various indicators show that the labor market overall remains sound, while inflation continues to rise, with service sector inflation stabilizing at around 3.5% in recent months, which far exceeds the Federal Reserve's target of 2%.
Schmid pointed to a concerning trend of a widening range of price increases, noting that as of August, nearly 80% of the categories included in official inflation statistics had seen price increases, compared to 70% at the beginning of the year. He added that while the impact of tariffs on inflation is expected to be relatively mild, he believes this suggests that policy is being calibrated appropriately rather than indicating a significant reduction in interest rates.
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