Federal Reserve's Schmid expects that the Federal Reserve may not achieve the 2% inflation target until 2026. The final phase of bringing inflation down to 2% may be the most challenging for monetary policy. The Federal Reserve's quantitative tightening is somewhat at odds with interest rate cuts. The Federal Reserve's balance sheet position continues to suppress yields. Currently, there is opposition to stopping the Federal Reserve's balance sheet reduction. There is a desire to avoid actions that could lead to volatility in the balance sheet reduction.