Fed's Schmid Pushes Back on Rate-Cut Prospects

Kansas City Fed President argues further easing could risk higher inflation

Published on Feb. 11, 2026

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Kansas City Federal Reserve President Jeffrey Schmid reaffirmed his resistance to further interest rate cuts, arguing that additional Fed easing could risk allowing inflation to remain too high. Speaking in Albuquerque, Schmid said the economy is on strong footing but cited persistent inflation as a sign that demand may be outpacing supply. He expressed optimism that artificial intelligence could boost growth without price increases, but cautioned it's too early for the Fed to relax its anti-inflation stance.

Why it matters

Schmid's comments signal continued division within the Federal Reserve on the appropriate monetary policy path, with some officials favoring further rate hikes to tame inflation while others see room for cuts to support economic growth. This debate will be closely watched as the Fed seeks to engineer a 'soft landing' for the economy.

The details

In his remarks, Schmid reiterated his view that the Fed should maintain its current interest rate level, arguing that further easing could allow inflation to remain too high. He cited the economy's strong footing as a reason to hold off on cuts, while also expressing optimism that AI could boost growth without fueling price increases. However, Schmid cautioned that it's premature for the Fed to relax its anti-inflation efforts.

  • Schmid spoke to a business audience in Albuquerque, New Mexico on Wednesday morning (February 11, 2026).

The players

Jeffrey Schmid

President of the Federal Reserve Bank of Kansas City.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

The takeaway

Schmid's comments underscore the ongoing debate within the Federal Reserve over the appropriate monetary policy path, with some officials favoring further rate hikes to combat inflation while others see room for cuts to support economic growth. This disagreement will be closely watched as the central bank seeks to engineer a 'soft landing' for the economy.