MNI BRIEF: Fed's Schmid-Dissented On Strong Growth, Inflation

Federal Reserve Bank of Kansas City President Jeff Schmid said Friday he dissented against a quarter-point rate cut this week for the same reasons that he did so in October: inflation remains too high and the labor market is still in balance. 

"I have not fundamentally changed my views on the economy relative to October. Inflation remains too high, the economy shows continued momentum, and the labor market — though cooling — remains largely in balance," he said in a statement. "I view the current stance of monetary policy as being only modestly, if at all, restrictive." 

The Fed can't afford to be complacent on inflation and the credibility its built over decades in fighting price pressures, Schmid said. The downward trend in long term interest rates could reverse if inflation uncertainty increases. 

Businesses in his district continue to express concerns about inflation, he said. "I will judge the restrictiveness of monetary policy by how the economy evolves, both in the data and based on what I’m hearing from contacts." (See MNI INTERVIEW: Fed Faces Politically Tumultuous Year -  Bullard)