{"id":437039,"date":"2026-08-27T20:40:15","date_gmt":"2026-08-27T13:40:15","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/feds-schmid-says-current-interest-rates-are-not-restraining-the-economy-credibility-intact-437039\/"},"modified":"2026-08-27T20:40:15","modified_gmt":"2026-08-27T13:40:15","slug":"feds-schmid-says-current-interest-rates-are-not-restraining-the-economy-credibility-intact","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/feds-schmid-says-current-interest-rates-are-not-restraining-the-economy-credibility-intact-437039\/","title":{"rendered":"Fed&#8217;s Schmid says current interest rates are not restraining the economy, credibility intact"},"content":{"rendered":"<div>\n<ul>\n<li>Interest rates are not restraining the US economy<\/li>\n<li>Midterms won&#8217;t affect Fed&#8217;s October decision<\/li>\n<li>I don&#8217;t see Fed&#8217;s credibility as damaged in recent weeks<\/li>\n<li>I would probably have supported rate hike at July meeting<\/li>\n<li>Unclear what policy setting is restricting right now<\/li>\n<li>Energy shock is leaking into economy<\/li>\n<li>The Fed needs to get to 2% inflation<\/li>\n<li>There may be room to have fewer FOMC meetings<\/li>\n<\/ul>\n<p class=\"isSelectedEnd\">Kansas City Fed President Jeffrey Schmid maintained his hawkish stance arguing that current interest rates are not restraining economic activity and reiterating Fed&#8217;s goal of returning inflation to the 2% target.\u00a0 <\/p>\n<p class=\"isSelectedEnd\">He also noted that it&#8217;s unclear what interest rate setting is need to restrain the economy enough to bring inflation back to target.\u00a0He added that\u00a0he  would have supported a rate hike at the July FOMC meeting if he was a voter (he&#8217;s not currently a voter until 2028). <\/p>\n<p class=\"isSelectedEnd\">Schmid dismissed the rumors about lack of Fed independence and said that the US\u00a0midterm elections won&#8217;t influence monetary policy decisions. He  argued that Fed&#8217;s credibility has not been damaged in recent weeks.<\/p>\n<p class=\"isSelectedEnd\">He warned that energy costs are beginning to spill over into  the economy, which could warrant a tighter monetary policy to lean against inflationary pressures. He also sounded positive about\u00a0the Fed\u00a0potentially having fewer scheduled FOMC meetings (Fed Chair Warsh proposed six meetings per year).\u00a0<\/p>\n<p>Overall, there&#8217;s nothing in his comments to move the markets as his hawkish stance is well known, and traders are waiting for Fed Chair Warsh&#8217;s speech tomorrow. As of now, traders are pricing in just 35% probability of a rate hike in September. That will be influenced by US-Iran developments, Fed Chair Warsh&#8217;s speech and the next US CPI report on September 11.\u00a0\u00a0<\/p>\n<p>                            This article was written by Giuseppe Dellamotta at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Interest rates are not restraining the US economy Midterms won&#8217;t affect Fed&#8217;s October decision I don&#8217;t see Fed&#8217;s credibility as damaged in recent weeks I would probably have supported rate hike at&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-437039","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/437039","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=437039"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/437039\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=437039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=437039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=437039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}