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MNI: Fed's Schmid Prefers Gradual Cuts, To Higher Neutral

Kansas City Fed President prefers avoiding contributing to financial market volatility.

MNI (WASHINGTON) - Kansas City Federal Reserve President Jeff Schmid said Monday he prefers the central bank scale back rate cuts to more modest adjustments so there is time to observe the economy’s reaction and to assess the neutral rate, which is likely "well above" what it was in the decade before the pandemic.

"My hope is for what I might call a more normalized cycle. A cycle where the Fed engages in modest adjustments to policy to keep the economy on an even keel of steady growth, stable prices, and full employment," he said according to prepared remarks. "Absent any major shocks, I am optimistic that we can achieve such a cycle, but I believe it will take a cautious and gradual approach to policy."

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MNI (WASHINGTON) - Kansas City Federal Reserve President Jeff Schmid said Monday he prefers the central bank scale back rate cuts to more modest adjustments so there is time to observe the economy’s reaction and to assess the neutral rate, which is likely "well above" what it was in the decade before the pandemic.

"My hope is for what I might call a more normalized cycle. A cycle where the Fed engages in modest adjustments to policy to keep the economy on an even keel of steady growth, stable prices, and full employment," he said according to prepared remarks. "Absent any major shocks, I am optimistic that we can achieve such a cycle, but I believe it will take a cautious and gradual approach to policy."

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