Kansas City Federal Reserve Bank President Schmid stated on Tuesday that he continues to oppose further interest rate cuts, noting that the U.S. labor market is in balance while inflation remains excessively high. "Inflation has been above the Federal Reserve's target for nearly five consecutive years," Schmid remarked in a speech prepared for the Metro Denver Executive Club. He emphasized that persistent demand outstripping supply is driving service prices up too rapidly, conflicting with the Fed's 2% inflation goal. "We must not let our guard down," he stressed. Schmid has long opposed further monetary easing by the Fed. Last year, he dissented against two rate cuts and supported the decision last month to maintain short-term borrowing costs within the 3.50%-3.75% range. He pointed out that the current inflation rate is close to 3% and highlighted that each percentage point increase in inflation reduces U.S. household purchasing power by $300 billion. Schmid explained that a key reason for his strong advocacy to bring inflation down to 2% is the severe impact high inflation has on low-income families. Speaking at the Economic Club of Colorado, Schmid said, "Inflation hits the bottom half of wage earners extremely hard, and I will remain highly sensitive to this." Although he did not mention the economic impact of the Iran conflict during his speech or the lengthy Q&A session, he noted, "We will closely monitor upcoming global political events." Financial markets had previously anticipated that a deterioration in the labor market, a decline in inflation, or a combination of both would prompt the Fed to cut rates again by mid-year. However, since the U.S. and Israel launched attacks on Iran over the weekend, traders have pushed back expectations for the next rate cut to a later date. Schmid expressed agreement with business contacts' optimistic expectations for economic growth in the coming year and suggested that the Trump administration's tax reform policies would support economic expansion. However, he dismissed the argument that artificial intelligence is boosting productivity fast enough to accelerate economic growth without triggering inflationary pressures—a key point for those who believe the Fed still has room to cut rates.