Fed's Schmid (2028 Voter) says they are open to possibility that AI could drive non-inflationary growth, but they're not there yet

• Inflation remains hot, leaving little room to be complacent.
• Opposes further rate cuts, cites a 3% inflation.
• US labour market remains balanced and demand is outpacing supply.

Fed’s Schmid’s remarks suggest a cautious optimism about AI’s potential for fostering non-inflationary growth, though he implies that current conditions remain too uncertain to make significant pivots in policy. His opposition to further rate cuts amid persistent 3% inflation signals that the Fed is still prioritizing inflation control over growth incentives, which may influence investor sentiment and rate expectations going forward.