Kansas City Federal Reserve Chairman Jeffrey Schmidt expressed doubt about interest rate cuts in September, saying policymakers still have more work to do about inflation.
Speaking to CNBC from the Fed’s annual symposium in Jackson Hole, Wyoming, Schmidt pushed back market prices, which strongly points to the Federal Open Market Committee, which will lower key borrowing rates next month.
“We’re in a really good place and I think we need to have very definitive data to move that policy rate right now,” he said in a “Scokebox” interview that aired Thursday. “We’ll get around the table in September and work together to get it, but yeah, I think there’s a lot to be said between now and September.”
Schmidt is a voter for the Pricing FOMC this year. Every year FRED FED hosts Jackson Hole Gathering, featuring keynote speeches from the chairman of Jerome Powell on Friday.
Comments will accompany market pricing with about 80% of the time, with a quarter-point reduction at the September 16th-17 meeting, according to CME Group’s FedWatch.
President Donald Trump and other White House officials have put aggressive pressure on the Fed to cut, maintaining tariffs as low interest rates are needed to reduce housing markets and government borrowing costs.
However, Schmidt said he is not convinced that the Fed has made sufficient progress towards its 2% inflation target.
“That last mile seems pretty difficult and I’m one of many people who believe there is a real, difficult, true cost to the last percentage of inflation in the system,” he said. “We might click. I think the inflation count is probably closer to three than two. I think there’s something to do.”
Usually outside of political contests, the Fed has found himself at the heart of multiple controversies, from pushing for lower rates for Trump to questions raised through large-scale renovation projects at two buildings in Washington, D.C.
A new wrinkle appeared Wednesday when Trump and director of federal housing finance agencies William Palt blamed Gov. Lisa Cook’s mortgage fraud. Pulte alleged in an interview with CNBC that CNBC said Cook received illegal loans in real estate in Michigan and Georgia. Trump demanded that Cook resign, but she said she would “not be bullied” to leave the post.
“There’s an expert responsibility within the Federal Reserve, and I’m sure she’ll handle the matter because she needs to handle them,” Schmidt said of the incident.
Asked about the pressures applied to central bank policymakers in general, he said, “The Great Steel is being tested by fire, so let’s have a conversation. In fact, the Americans understand what the Fed is and what it does, and they have a value proposition as to what we are doing.”
In minutes after the July meeting announced Wednesday, officials were concerned about both inflation and unemployment. Schmidt said he considers the labour market to be “solid” form.
