by By Howard Schneider
Washington (Reuters) -the American Federal Reserve has time to study the effect of rising import rates on prices and economic growth before they decide on further interest rate reductions, said Kansas City Fed President Jeff Schmid on Tuesday.
“The current attitude of monetary policy, which is characterized as ‘wait -and -see’, is appropriate,” Schmid said in comments prepared for delivery to an agricultural top in Nebraska.
“The resilience of the economy gives us time to observe how the prices and the economy are developing,” before changing the benchmark policy percentage, said Schmid, a voter this year in the rate of the FED’s Federal Open Market Committee, which then met on July 29-30.
The FED has kept its benchmark percentage steadily in a reach of 4.25% to 4.5% since December, despite calls from President Donald Trump for tariff reductions.
FED officials in recent projections anticipate the end of the year, but have emphasized the uncertainty about trade policy and generally expect a slower growth, higher unemployment and higher inflation in the coming months.
Inflation remains above the target of 2% of the FED, and “Contacts expect almost uniform to expect raised rates and weigh the activity,” said Schmid, adding that it “probably” seemed to be “the inflation and working goals of the FED” in conflict. “
But “there is much less clarity about when and with how much,” Schmid said, an argument to leave the interest rates unchanged until the direction of the economy is clearer.
(Reporting by Howard Schneider; editing by Jamie Freed)
