Kansas City Federal Reserve President James Schmid favors maintaining current interest rate levels, arguing against further cuts in the face of persistent inflation. Emphasizing the need to strike a balance between restrictive and overly loose monetary policy, Schmid highlighted the risks associated with high inflation while noting that the Fed’s recent 25 basis point decrease provides appropriate risk management in a cooling labor market. However, he noted a continued concern about overall job market health with service sector inflation stabilizing at around 3.5% despite staying above the target of 2%. Schmid also emphasized his worry about broad price increases, as nearly 80% of categories in official inflation data saw price hikes by August, up from 70% earlier in the year. While expecting the impact of tariffs to have a minimal effect on inflation, he suggests current policy is appropriately calibrated and not a signal for significant rate cuts.