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Fed's Schmied: Further rate cuts may have a lasting impact on inflation.

On November 14, Fed's Schmidt stated that further rate cuts could have a lasting impact on inflation, and the Fed may also shift its balance sheet portfolio towards short-term securities. The Fed can support a smaller scale of its balance sheet and alleviate liquidity pressure by lowering the reserve interest rate and easing the use of the standing repo facility. There is little reason to believe that reserve demand will steadily grow with nominal GDP. ( Jin10 )

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