Richmond Federal Reserve President Thomas Barkin said Tuesday that U.S. central bank policymakers face tension between their inflation and employment goals as they navigate economic uncertainty.
“On net, we are seeing pressure on both sides of our mandate, with inflation above our target and job growth down,” Barkin said in prepared remarks at Shenandoah University in Virginia. He noted there are “mitigants on both sides,” with consumers pushing back on price increases and declining labor supply keeping unemployment stable.
Barkin, who doesn’t vote on monetary policy this year, did not indicate whether he supports another interest rate cut at the Fed’s December 9-10 meeting. He described the current situation as “not a particularly comfortable place to be,” likening it to “docking a boat at night without a lighthouse.”
The Fed official said credit card data and corporate earnings suggest economic growth remains healthy, though some sectors and households are struggling. While the job market appears balanced overall, Barkin noted that “labor feels quite available with plenty of quality applicants per opening,” and pointed to recent layoff announcements by Amazon, Verizon, and Target as “cause for caution.”
In an interview, Barkin added that he’s not hearing that companies plan further layoffs, and while the labor market is softening, he doesn’t expect it to “soften that much more.”
Regarding inflation, Barkin said it remains above target but isn’t likely to accelerate, with consumer resistance to price increases and productivity improvements helping slow its pace. He noted it’s “not clear it is heading back to 2%.”
“It’s hard to declare victory on either mandate, but also not clear either requires a response,” Barkin said, adding that “without compelling data it is hard to get a broad consensus” among Fed officials.
Barkin Sees Inflation, Jobs Pressure at Fed
Richmond Federal Reserve President Thomas Barkin said Tuesday that U.S. central bank policymakers face tension between their inflation and employment goals as they navigate economic uncertainty.
“On net, we are seeing pressure on both sides of our mandate, with inflation above our target and job growth down,” Barkin said in prepared remarks at Shenandoah University in Virginia. He noted there are “mitigants on both sides,” with consumers pushing back on price increases and declining labor supply keeping unemployment stable.
Barkin, who doesn’t vote on monetary policy this year, did not indicate whether he supports another interest rate cut at the Fed’s December 9-10 meeting. He described the current situation as “not a particularly comfortable place to be,” likening it to “docking a boat at night without a lighthouse.”
The Fed official said credit card data and corporate earnings suggest economic growth remains healthy, though some sectors and households are struggling. While the job market appears balanced overall, Barkin noted that “labor feels quite available with plenty of quality applicants per opening,” and pointed to recent layoff announcements by Amazon, Verizon, and Target as “cause for caution.”
In an interview, Barkin added that he’s not hearing that companies plan further layoffs, and while the labor market is softening, he doesn’t expect it to “soften that much more.”
Regarding inflation, Barkin said it remains above target but isn’t likely to accelerate, with consumer resistance to price increases and productivity improvements helping slow its pace. He noted it’s “not clear it is heading back to 2%.”
“It’s hard to declare victory on either mandate, but also not clear either requires a response,” Barkin said, adding that “without compelling data it is hard to get a broad consensus” among Fed officials.