Kansas City Fed’s Stance on Unemployment and Rate Cuts

(Reuters) – Kansas City Fed Bank President Jeff Schmid, known for his hawkish views, indicated on Thursday that he is scrutinizing the factors behind the recent unemployment rate increase. Schmid plans to allow upcoming data to influence his decision on supporting a potential rate cut next month.

“We’ve got some data sets to come in before September,” Schmid told CNBC at the annual global central bankers’ conference in Jackson Hole, Wyoming, regarding the Fed’s policy meeting scheduled for Sept. 17-18.

He emphasized the importance of analyzing the unemployment rate more closely, stating, “I’m going to let the data show where we lead… I would agree with several of my colleagues that you probably want to act maybe before (inflation) gets to two (percent), but that sustainability to two I think is really important.”

The expectation is that the U.S. central bank will begin to lower its benchmark policy rate in the upcoming meeting, as most Fed officials feel optimistic about recent inflation data yet remain concerned about the job market’s health.