Kansas City Federal Reserve President Jeffrey Schmid has expressed doubts about lowering interest rates in September, citing concerns over inflation. In a CNBC interview during the Fed’s annual symposium, Schmid stated that policymakers need definitive data to adjust the key borrowing rate and emphasized that there is still more work to be done on inflation.
Schmid’s comments contradict market expectations, which suggest a nearly 80% chance of a quarter percentage point reduction in interest rates at the upcoming meeting. The Kansas City Fed hosts this annual gathering, which will feature Chair Jerome Powell’s keynote speech.
President Donald Trump has been pushing for lower interest rates to address his concerns over tariffs and the housing market. However, Schmid remains unconvinced that the Fed is making sufficient progress towards its 2% inflation goal. He warned that there may be a slight increase in inflation and highlighted the challenges of reaching the remaining percentage point.
Schmid also discussed the ongoing controversies surrounding the Federal Reserve, including the recent accusations against Fed Governor Lisa Cook by Trump and William Pulte. Despite this pressure, Schmid emphasized the importance of transparency and education for the American public about the Fed’s role and objectives.
In related news, minutes from the July meeting revealed concerns over both inflation and unemployment. Schmid expressed confidence in the labor market, describing it as “solid.”
Source: https://www.cnbc.com/2025/08/21/kansas-city-feds-schmid-shows-hesitation-about-widely-expected-september-rate-cut.html