Fed's Schmid (2028 voter) says little reason to cut rates; prefer to keep monpol modestly restrictive; inflation is too hot
Importance
Level 1
- Cutting rates could worsen inflation without helping employment much.
- December CPI consistent with close to 3% inflation.
- Inflation a top concern among business contacts.
- Monpol is currently not very restrictive and economy shows momentum.
- Labour market stresses are structural, rate-cutting won't patch them over.
- Tax policy and deregulation likely to boost investment, spending, and demand.
- No room to be complacent on inflation.
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