(Reuters) - The Federal Reserve is navigating a multifaceted economic environment that presents both challenges and opportunities for monetary policy, according to Kansas City Federal Reserve Bank President Jeff Schmid. In a webcast conversation that took place on Wednesday with Lorie Logan, President of the Dallas Federal Reserve Bank, Schmid highlighted a growing sense of unease within the agricultural sector due to current tariff policies. This tension comes amidst indications that declining energy prices could provide a much-needed boost to the economy, potentially easing inflation pressures.

I just think that we've got to, we've got to be a little patient to see how some of these things play out, Schmid expressed during the event. His comments reflect a cautious optimism about the Fed's ability to respond to evolving economic conditions. Schmid emphasized that the Fed remains committed to its dual mandate: achieving price stability while ensuring full employment. He reassured that the central bank will adapt its strategies in a constructive manner to address any economic disruptions that may arise.

Earlier on the same day, Federal Reserve Chair Jerome Powell also addressed the current economic climate, stating that the central bank would hold off on making any adjustments to interest rates until more comprehensive data becomes available. However, he cautioned that the tariff policies implemented by President Donald Trump could inadvertently lead to increased inflation and a rise in unemployment. This situation poses a significant dilemma for the Federal Reserve, which may eventually have to prioritize between combating inflation and supporting job growth.

During their discussion, Schmid and Logan did not delve deeply into specifics regarding interest-rate policies or the recent fluctuations in market stability, as investors continue to grapple with the ramifications of the administration's trade policies.

Schmid also touched on a critical issue: the importance of the Federal Reserve's political independence. He underscored how this autonomy is essential for Fed policymakers to focus solely on the financial and economic well-being of Americans. Everything is being challenged now... All the firewalls we thought we had have turned into screen doors, Schmid remarked, reflecting on the increasing scrutiny faced by independent institutions. Nevertheless, he remains hopeful, noting, I think you are tested by fire... and frankly the people I talk to, both politicians and the public, seem to be pleased with that structure, so I'm very optimistic, he concluded.