Bank of America just raised its EUR/USD forecast
Investing.com -- Kansas City Fed President Jeffrey Schmid indicated Thursday that the Federal Reserve is not in a hurry to cut interest rates, citing inflation that remains above the central bank’s 2% target and a solid labor market.
"I think we’re in a really good spot and I think we really have to have very definitive data to be moving that policy right now," said Schmid, who holds a voting position on interest rate policy this year.
Schmid noted that inflation is "likely closer to 3 than 2" percent, emphasizing that "there is work to do" and that "the last mile of inflation is pretty hard."
Regarding the labor market, Schmid described it as "solid" with supply and demand for workers appearing "in balance despite immigration impacts." He mentioned some cooling in the first couple of quarters but said there is optimism now.
The Fed official said he is "searching for data that shows Fed policy is restrictive" and cautioned about "what lowering short term rates would do to inflation mentality."
Schmid also expressed confidence in Fed Governor Lisa Cook, who was recently criticized by U.S. President Donald Trump, stating he is "sure that Cook will handle matters as she needs to."
Looking ahead to the Fed’s September meeting, Schmid pointed out there is "a lot of data still until September" and that "markets and spreads are in good shape." He suggested that mortgage applications could potentially be simplified.