Fed Officials Say Policy Should Stay Restrictive as Tariff Drag Emerges

Several Federal Reserve policymakers said on Thursday that the central bank’s current interest-rate setting remains mildly restrictive and should stay that way as officials work to push inflation back toward their 2% target. Governor Adriana Schmid told Bloomberg Television that policy is “modestly restrictive and appropriate,” language echoed minutes later by Atlanta Fed President Raphael Bostic, who described the stance as “marginally restrictive.” Bostic added that he expects U.S. economic growth to be “relatively tepid” for the remainder of 2025. Governor Mark Hammack, speaking at a separate event, said it is “important we maintain a modestly restrictive policy” and cautioned that the economy is only beginning to feel the drag from the 145% tariff on Chinese goods that took effect in April. Hammack predicted the full impact of the levy will not be evident until next year.