[Federal Reserve's Schmidt: Inflation Remains a Key Issue for the Fed] Jin10 News, February 26 – Federal Reserve's Schmidt stated on Wednesday that excessively high inflation remains a key issue the Fed needs to address, but he did not specify how monetary policy should respond. Schmidt said: 'I think we still have work to do on inflation,' while also noting, 'I think the employment situation is quite good.' He did not elaborate on how these factors influence his outlook on monetary policy. Schmidt had previously expressed skepticism about the Fed's rate cuts last year, when officials lowered the target rate range to 3.5% to 3.75%. The market expects the Fed to cut rates further this year, but officials have provided little guidance. Schmidt also discussed the Fed's balance sheet, stating that internal discussions are focused on understanding the appropriate level of reserves needed by the financial system. He pointed out that the large holdings of mortgage-backed securities from the Fed's past bond-buying actions continue to suppress housing borrowing costs. Due to the current scale of the Fed's mortgage-backed securities holdings, mortgage rates 'may be 75 to 100 basis points lower than they otherwise would be.'