Federal Reserve member Schmid: What happened was normalization, not a deterioration of the labor market.

On Monday evening, Federal Reserve member from Kansas, Jeffrey Schmid, spoke about the recent economic data, particularly in the labor market.

Schmid noted that the recent declines in U.S. data are likely a normalization of the U.S. labor market following a period of excessive hiring and unsustainably low unemployment rates. He added that this should not be viewed as a clear deterioration of the U.S. labor market overall.

In addition to this, Schmid's statements also addressed the following:

• A cautious, steady, and purposeful approach should be taken to reduce interest rates.
• Prices should stabilize at levels much higher than pre-pandemic levels.
• The Federal Reserve should prevent large fluctuations in interest rates.
• He is reasonably confident that inflation is heading in the right direction.
• The Federal Reserve will rely on data to determine monetary policy movements.
• What has happened in the labor market was a normalization of the labor market, not a deterioration.
• He prefers to avoid large cuts in interest rates.
• He supports well-studied and gradual strategic moves in monetary policy.
• He prefers a shorter duration and a smaller balance sheet, and favors a relatively aggressive approach to reducing the balance sheet.