Federal Reserve's Schmidt hints not ready to cut interest rates yet
According to Golden Finance, Kansas Federal Reserve Chairman Schmidt hinted that he is not yet ready to support a rate cut, as inflation is above target and the labor market remains healthy despite some cooling. In his speech to the Kansas Bankers Association, Schmidt said that recent declines in inflation are "encouraging," and more reports of low price pressures will increase his confidence in inflation returning to the central bank's 2% target, thereby being able to lower interest rates. "We're close, but we haven't fully achieved our goal," Schmidt said. He did not express an opinion on when the Fed should cut interest rates, saying "the policy path will be determined by data and economic momentum." Although U.S. non-farm employment was weaker than expected in July, Federal Reserve officials ignored calls for stimulus action. The market expects a greater than 50% chance of a 50 basis point rate cut by the Fed in September. "Overall, the labor market still looks very healthy," Schmidt said. "Last week's July employment report raised many questions about this resilience. But it's worth noting that many other indicators continue to show strength."
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