Fed’s Schmid signals open mind on Sept rate cut

WASHINGTON, Aug 22 (Reuters): Kansas City Fed Bank President Jeff Schmid, one of the U.S. central bank's more hawkish policymakers, said on Thursday he was taking a closer look at the dynamics behind the rise in the unemployment rate and would let data guide him on whether to support a rate cut next month.
"We've got some data sets to come in before September," Schmid said in an interview with broadcaster CNBC at the start of the annual global central bankers' conference hosted by the regional Fed bank in Jackson Hole, Wyoming, in reference to the Fed's next policy meeting on Sept. 17-18.
"It bears looking harder at it," he said of the unemployment rate. "I'm going to let the data show where we lead...I would agree with several of my colleagues that you probably want to act maybe before (inflation) gets to two (percent) but that sustainability to two I think is really important."
The U.S. central bank is widely expected to begin reducing its benchmark policy rate at its upcoming meeting, with most Fed officials buoyed by encouraging inflation data and increasingly anxious about the health of the job market.
Meanwhile, sales of previously owned homes in the United States edged up in July, industry data showed on Thursday, breaking a four-month trend of declines.
Homebuyers in the world's biggest economy have been grappling with a surge in mortgage rates after the US central bank rapidly lifted the benchmark lending rate in 2022.
But the popular 30-year fixed-rate mortgage ticked down slightly in late July, potentially offering some relief to buyers.
Existing home sales rose 1.3 percent from June to a rate of 3.95 million, seasonally adjusted, said the National Association of Realtors (NAR).
This was slightly above a Briefing.com consensus of 3.9 million, and an uptick from June after four straight months of falling sales.
"Despite the modest gain, home sales are still sluggish," said NAR chief economist Lawrence Yun, noting that the figures remain relatively low.
"But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates," he said.
Compared with a year ago, sales of existing homes were down 2.5 percent according to the NAR.
The median sales price was $422,600 in July, higher than the same month in 2023, and all four US regions saw price increases.
With the Federal Reserve widely expected to cut interest rates in September, homebuyers might be holding back in hopes of mortgage rates cooling further in the near future.
As of August 15, the 30-year fixed-rate mortgage averaged 6.5 percent according to Freddie Mac, down from 6.8 percent in late July.