Fed Schmid: Federal Reserve policy remains loose and inflation is still above target
On 27 August, Federal Reserve Schmidt stated that, while inflation continued to exceed the Fed ' s 2 per cent target, the Fed ' s current interest rate level did not contain the United States economy. Schmid is saying, "For me, I think short-end interest rates may be lax. So we have work to do." At the July meeting, policymakers voted to maintain interest rates between 3.5 and 3.75 per cent. Three officials voted against the increase. The minutes of the meeting showed that a number of officials, including some non-voting officials, were in favour of an increase in interest rates, while many others indicated that monetary policy must be tightened if inflation did not fall. “Some of my colleagues were opposed at the last meeting, so I may also belong to this camp,” Schmid said. Schmidt also refuted the argument that the Fed's credibility had been damaged. Previously, a press conference in July by Federal Reserve Chairman Walsh led to a strong reaction from the bond market, which was seen as undermining the Fed ' s credibility。
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