Federal Reserve Bank of Kansas City President Jeffrey Schmid spoke at Secured Finance Network’s Independent Finance Roundtable in Missouri earlier this week.
“Our understanding of current and developing economic conditions is informed by direct, local engagement with the industries and geographies that make up the American economy,” Schmid said. “Events like this one today play an important role in the process.”
“Jeffrey Schmid offered valuable economic perspective and important historical context, which is more important than ever during times of uncertainty,” said SFNet CEO Richard Gumbrecht. “A thoughtful exchange between regulators and those representing our $5 trillion secured finance community, helps us achieve our mission of effectively deploying working capital to accelerate economic growth.”
Schmid emphasized the critical role of the Federal Reserve’s regional structure in shaping effective monetary policy and provided insights on recent economic developments, inflation risks, and long-term interest rate dynamics.
Reflecting on recent financial market volatility, he acknowledged rising uncertainty amid shifting economic outlooks, including concerns tied to recent tariff announcements and their potential inflationary effects.
“We are entering a challenging period from a position of strength,” he stated, pointing to solid GDP growth, improving productivity, and a historically strong labor market. That being said, he cautioned that economic momentum may be tested by emerging inflation risks and employment concerns.
Inflation remains a key area of focus for Schmid. “I intend to keep my eye squarely focused on the outlook for inflation,” he said and expressed concern over inflation expectations becoming unanchored, referencing historical lessons from the 1970s and 1980s.
Looking ahead, he outlined two opposing long-term trends that could affect interest rates. Demographic shifts, including an aging workforce, may put downward pressure on rates, while increased federal debt and potential declines in global demand for U.S. assets could push rates higher.
“In summary, there are reasons that rates could stay high in the long run and reasons why they might decline,” he added. “The ultimate trajectory will be determined by the balance between these forces.”
A full transcript of the remarks can be found here: https://www.kansascityfed.org/speeches/remarks-on-the-economic-outlook/
About The Secured Finance Network (SFNet)
Founded in 1944, the Secured Finance Network, Inc. (SFNet) is the international trade organization representing the asset-based lending, factoring, trade and supply chain finance industries, with over 1,000 member organizations throughout the US, Canada and around the world. SFNet provides education, networking opportunities and industry advocacy to the global secured finance community. For more information, please visit www.sfnet.com.
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Contacts
Jeremy Milner
jmilner@gregoryfca.com
