The Kansas City Fed President on the First Jackson Hole of the Warsh Era | Odd Lots

Kansas City Fed President Jeff Schmid examines the current economic landscape, emphasizing structural shifts in the labor force driven by baby boomer retirements and the potential for AI to bridge critical knowledge gaps. While the economy maintains growth between two and three and a half percent, the Federal Reserve remains focused on its dual mandate to return inflation to two percent. Schmid identifies bond yields as a vital signal for market risk and credit demand, noting that higher rates influence capital allocation and business decision-making. He advocates for transparent, debate-driven policymaking within the FOMC, supporting a culture where diverse perspectives are openly contested to refine the Fed's reaction function. The conversation also addresses the evolving role of payments innovation and the necessity of maintaining robust liquidity in an era of instant settlement.