EURUSD under pressure 📌Fed's Goolsbee and Schmid remarks on US monetary policy

Fed bankers Goolsbee and Schmid commented today on the U.S. economy and Federal Reserve policy. Below are their remarks.

Schmid (Fed)

• A quarter-point rate cut was a reasonable risk-management move.

• Inflation remains too high, while the labor market is still balanced.

• The Fed’s supervisory role over banks is important for the central bank’s broader mission.

• Future monetary policy decisions will be data-dependent.

• Fed policy is currently slightly restrictive — which is the right place to be.

• Inflation is still too high, and the current labor market remains largely in balance.

• Recent data point to rising risks for the labor market.

• A rate cut was appropriate to offset labor market risks.

• The Fed is currently close to fulfilling its mandates, but policy must remain forward-looking.

Goolsbee (Fed)

• I remain broadly optimistic that we are on the “golden path,” with inflation trending lower.

• In the short term, the biggest concern is the risk of persistently higher inflation.

• AI adoption by businesses has not been as large as many assume.

• Historically, short or limited government shutdowns do not have lasting economic effects.

• Some labor market measures are pointing to greater stability.

• The labor market is cooling mildly.

• If government can dictate to the central bank what to do with rates, inflation rises.

• Rates could fall further if stagflation risks fade.

• I see a “strange environment” with risks on both jobs and inflation.

• Rates could come down quite a bit more if inflation heads toward 2%, but I am cautious about front-loading cuts.

• Relying on inflation being transitory makes me uneasy.

• I am somewhat uncomfortable with cutting rates too quickly based solely on slowing job data.

• The labor market seems to be cooling while inflation is rising.

 

Source: xStation5

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