Fed's Schmid signals open mind on September rate cut

(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.

(Reporting by Lindsay Dunsmuir; Editing by Bernadette Baum)

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