Federal Reserve's Schmid opposes rate cut, emphasizes inflation risk

BlockBeats News, October 31st - On Friday, Kansas City Fed President Esther George said that he dissented against the Fed's rate cut decision this week, citing concerns that economic growth and investment could put upward pressure on inflation. George stated: "In my view, the labor market is overall at balance, the economy is showing sustained momentum, and inflation remains too high." Earlier this month, the U.S. Labor Department reported that consumer prices rose 3% over the year ending in September, with inflation running above the Fed's 2% target for over four years. George reiterated that businesses in her region are worried about ongoing cost increases and that monetary policy should maintain some restraint on demand growth.

George said: "I believe that a 25 basis point rate cut would not do much to alleviate labor market pressures, which are more likely originating from technological and demographic shifts. However, if markets question the Fed's commitment to the 2% inflation target, a rate cut could have a more lasting impact on inflation." She also stated that current monetary policy is only mildly restrictive, and financial market conditions remain loose. This is the first time George has dissented as a Fed official. (via Jinse Finance)