---
title: "Federal Reserve's Schmid explains reasons for opposing interest rate cuts, citing concerns over high inflation"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/263760735.md"
description: "Kansas City Federal Reserve Bank President Jeff Schmid opposes interest rate cuts, concerned that economic growth and investment will drive up inflation. He pointed out that the labor market is fundamentally balanced, the economy has sustained momentum, and inflation remains above the Federal Reserve's 2% target. Schmid believes that interest rate cuts have limited impact on labor market pressures and may weaken the Federal Reserve's commitment to its inflation target. He voted against interest rate cuts for the first time, emphasizing that monetary policy should impose constraints on demand growth"
datetime: "2025-10-31T13:20:50.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/263760735.md)
  - [en](https://longbridge.com/en/news/263760735.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/263760735.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/263760735.md) | [繁體中文](https://longbridge.com/zh-HK/news/263760735.md)


# Federal Reserve's Schmid explains reasons for opposing interest rate cuts, citing concerns over high inflation

Jeff Schmid, President of the Federal Reserve Bank of Kansas City, stated that his vote against the interest rate cut this week was due to concerns that economic growth and investment could exert upward pressure on inflation.

"In my assessment, the labor market is essentially balanced, the economy shows sustained momentum, and inflation remains too high," Schmid said in a statement released on Friday.

Federal Reserve officials voted on Wednesday to lower the benchmark interest rate by 25 basis points, marking the second rate cut in two months aimed at supporting a slowing labor market. Federal Reserve Chairman Jerome Powell told reporters after the decision that the widely anticipated rate cut in December is not a foregone conclusion and noted that some of his colleagues are concerned about inflation.

Data released earlier this month by the U.S. Department of Labor showed that consumer prices rose 3% in the year ending in September, with inflation exceeding the Federal Reserve's 2% target for more than four consecutive years. Schmid reiterated that businesses in his district are concerned about ongoing cost increases and added that monetary policy should exert a dampening effect on demand growth.

"I do not believe that lowering the policy rate by 25 basis points will have much impact on the pressures in the labor market, which are more likely to stem from technological and demographic changes. However, if the market begins to question the Federal Reserve's commitment to the 2% inflation target, a rate cut could have a more lasting impact on inflation," Schmid said.

Schmid indicated that, given the loose financial market conditions, monetary policy currently has only a modest restrictive effect.

This week marked Schmid's first vote against the Federal Reserve as an official. He joined the Federal Reserve in 2023 and became a voting member of the Federal Open Market Committee for the first time this year. Federal Reserve Governor Stephen Milan also dissented at the meeting, but he favored a 50 basis point cut in the federal funds rate

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