Remarks like Schmid’s are becoming a regular refrain for Fed officials. Many have said they believe the neutral rate — the level where rates neither fuel nor dampen economic growth — has likely risen since the pandemic. But none has expressed confidence over where it lies.
Several Federal Reserve officials Wednesday reiterated their deep uncertainty over how far the central bank will need to lower interest rates, highlighting the difficulty policymakers face in trying to determine the right setting to keep the economy on an even keel.
“While now is the time to begin dialling back the restrictiveness of monetary policy, it remains to be seen how much further interest rates will decline or where they might eventually settle,” Kansas City Fed President Jeff Schmid said in a speech at an energy conference co-hosted by the Kansas City and Dallas reserve banks.
