Fed’s Schmid: Inflation is too hot.

Federal Reserve (Fed) Bank of Kansas City President Jeffrey Schmid said that he prefers to keep the monetary policy modestly restrictive as cutting rates could worsen the inflation situation at the Economic Club of Kansas City on Thursday.

Key takeaways

Inflation is too hot.

Prefer to keep monetary policy modestly restrictive.

Cutting rates could worsen inflation without helping employment much.

Inflation a top concern among business contacts.

December CPI consistent with close-to-3% inflation.

Monetary policy is currently not very restrictive, economy shows momentum.

Labor market stresses are structural, rate-cutting won't patch them over.

Tax policy, deregulation likely to boost investment, spending, demand.

No room to be complacent on inflation.”