Fed's Schmid: I won't let enthusiasm over rising productivity get ahead of data
|Federal Reserve (Fed) Bank of Kansas President Jeffrey Schmid made a rare appearance on Wednesday, flagging potential pitfalls on the path toward lower interest rates. The head of the Kansas Fed also took a potshot at market participants who insist on hoping and praying for a return to near-zero interest rates that most financial segments became accustomed to over the years following the mid- to late-2000's global financial crisis.
Key highlights
I won't let enthusiasm over rising productivity get ahead of data or commitment to reaching the Fed's goals.
I hope productivity growth can outrun the effects of slowing population growth, and rising fiscal deficits.
Fed rate cuts to date are an acknowledgement of growing confidence inflation is on path to 2% goal.
It remains to be seen how much more the Fed will cut rates, and where they may settle.
The baseline of interest-rate cost appears to be higher than people thought a year or two ago.
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