Fed's Schmid says rate cut was right move to offset job market risks

Core Viewpoint - The Federal Reserve's recent interest-rate cut was deemed necessary to maintain a healthy job market amid concerns of potential labor market weakening [1][2][3]. Economic Conditions - The economy is currently performing well concerning the Fed's inflation and job goals, but there are signs that the labor market may weaken more than previously anticipated [2]. - Inflation pressures remain high relative to the Fed's 2% target, and there are concerns that these pressures could worsen due to trade tariffs [5]. Monetary Policy Actions - The Federal Reserve cut the policy rate by 25 basis points, bringing the target range to between 4% and 4.25% [4]. - Additional rate cuts are anticipated, with expectations to end the year with a target rate around 3.50% to 3.75% [7]. - The Fed is balancing its inflation objectives with concerns over the labor market, moving towards a slightly restrictive monetary policy stance [9]. Internal Discussions - Fed officials are divided on the pace of rate cuts, with some advocating for a cautious approach due to ongoing inflation concerns, while others push for aggressive action to protect the labor market [8].