Schmid Says Inflation Concerns Drove Fed Dissent

By Matt Grossman

Kansas City Fed President Jeffrey Schmid said that concerns about elevated inflation drove his dissenting vote against the Federal Reserve's rate cut this week.

In a Friday morning statement, Schmid said that price increases are still higher than the Fed's target and argued that the rest of the economy remains in solid shape, an assessment setting him at odds with the majority of Fed committee members, whose concerns about the labor market drove the decision to cut. Schmid joined Chicago Fed President Austan Goolsbee in pushing back on the rate cut, while Stephen Miran, a Fed governor recently appointed by President Trump, dissented in favor of an even bigger cut.

In Schmid's first year as a voting member of the Fed's policy committee, he has staked out a hawkish anti-inflation stance, speaking frequently about the importance of taming price increases and dissenting against two of the central bank's three 2025 rate cuts. Schmid took the reins at the Kansas City Fed in 2023 and served his first turn as a voter this year under the system that rotates seats annually among the system's 12 regional reserve-bank presidents.

At the December meeting, little had changed to persuade Schmid it was time for further monetary easing, he said--especially given that the recent government shutdown has delayed some economic data by months.

After the Fed's recent rate cuts, which have brought its targeted interest rate down to a range of 3.5% to 3.75%, the central bank's policy stance might be doing very little, if anything, to push inflation back down to the 2% target, Schmid said.

Over the past decades, "one of the greatest economic policy successes for the Fed, for the country, and perhaps for the world, has been the decline in worries about inflation," Schmid said. Complacency about tackling inflation puts that success at risk, Schmid said.

At the Fed's next meeting in January, Schmid will no longer have a voting seat on the policy committee. But two of next year's voters, Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan, have expressed similar caution about further cuts in recent comments, complicating the path for Fed Chair Jerome Powell--or his eventual successor starting in May--to push through additional easing.

Write to Matt Grossman at matt.grossman@wsj.com

(END) Dow Jones Newswires

December 12, 2025 08:44 ET (13:44 GMT)