Overview
- In Albuquerque remarks, Jeffrey Schmid said keeping policy restrictive is warranted because inflation remains above target and demand is outpacing supply.
- He argued recent productivity gains may stem from workers staying in jobs longer rather than durable technology-driven improvements from AI.
- Schmid warned that additional cuts risk letting high inflation persist and said he sees little evidence current rates are restraining an economy still growing above trend.
- The Fed held rates steady late last month and is expected to stay on hold for now, with fresh U.S. inflation data due Friday to guide assessments.
- Schmid is not an FOMC voter this year, and his stance runs counter to market expectations for two cuts and to arguments from President Trump’s team and Fed chair nominee Kevin Warsh that AI-driven productivity supports easing.