Kansas Fed President Schmid signaled he is not yet ready to support a rate cut because inflation is above target and the labor market remains healthy, albeit somewhat cooler. In remarks to the Kansas Bankers Association, Schmid said the recent decline in inflation was "encouraging" and that more reports of low price pressures would increase his confidence that inflation is returning to the central bank's 2 percent target and would be able to lower interest rates as a result. "We're close, but we're not quite there yet," Schmid said. He did not comment on when the Fed should cut rates, saying "the path of policy will be determined by data and economic momentum." While U.S. nonfarm payrolls were weaker than expected in July, Fed officials ignored calls for aggressive action. Markets are pricing in a greater than 50 percent chance that the Fed will cut interest rates by 50 basis points in September. "Overall, the labor market still looks healthy," Mr. Schmid said. "Last week's July jobs report has many people questioning that resilience. But it's worth noting that many other indicators are showing continued strength."