Kansas City Fed's Schmid Sees Inflation as Too Hot

01:51 PM EST, 11/14/2025 (MT Newswires) -- Kansas City Fed President Jeffrey Schmid said Friday that inflation remains too hot, cautioning that additional interest rate cuts may stoke price pressures.

The consumer price index accelerated to 3% year over year in September, the Bureau of Labor Statistics reported late last month. That's well above the Federal Reserve's 2% target.

"My view is that with inflation still too high, monetary policy should lean against demand growth to allow the space for supply to expand and relieve price pressures in the economy," Schmid said in prepared remarks for delivery in Colorado.

Schmid voted in favor of leaving rates unchanged last month, when the Federal Open Market Committee lowered the lending rate by 25 basis points for a second straight meeting.

"(Interest rate) cuts could have longer-lasting effects on inflation as our commitment to our 2% objective increasingly comes into question," Schmid said Friday. "This was my rationale for dissenting against the rate cut at the last meeting and one that continues to guide my thoughts as I head into the meeting in December."

Recently appointed Fed Governor Stephen Miran preferred a 50-basis-point cut at the most recent meeting.

The probability of a quarter-percentage-point rate cut next month fell to 44% Friday from 50% the day before and 67% a week ago, according to the CME FedWatch tool.

On Wednesday, Atlanta Fed President Raphael Bostic said the Fed should keep its monetary policy steady until there's "clear evidence" that inflation is approaching the central bank's 2% goal. On Oct. 31, Dallas Fed President Lorie Logan also expressed opposition to further easing.

Schmid said the US economy is showing continued momentum, with a labor market that's "largely in balance" despite signs of cooling.

"Right now, I see an economy that is showing momentum and inflation that is too hot, suggesting that policy is not overly restrictive," Schmid said.

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