Fed’s Schmid: Labor Market Cools, Inflation Still Elevated
Federal Reserve official Schmid said the U.S. labor market is showing clear signs of cooling but remains broadly balanced for now. However, inflation is still running too high, even as the economy continues to show underlying growth momentum.
Schmid noted that since the October FOMC meeting, there have been no material shifts in the overall macro picture — reinforcing the Fed’s cautious, data-dependent stance.
The takeaway is mixed: easing labor pressures offer some relief, but sticky inflation keeps policy flexibility limited. This balance explains why markets are struggling to price aggressive rate cuts in the near term.
For risk assets, it’s a reminder that policy patience, not pivot speed, remains the dominant theme.
