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Federal Reserve Bank of Richmond President Tom Barkin warned that inflation is too high, though he sees tentative signs that price pressures may moderate soon.\u00a0<\/p>\n
\u201cThose numbers are too high,\u201d Barkin said Sunday in an interview with Bloomberg on the sidelines of the Aspen Ideas Festival in Aspen, Colorado.<\/p>\n
A report released Thursday showed the personal consumption expenditures index \u2014 the Fed\u2019s preferred metric \u2014 rose 4.1% in the year through May, the most since April 2023. While the war in Iran drove up the price of oil and other goods, the increase in price pressures has been more widespread.\u00a0<\/p>\n
\u201cIt\u2019s hard to have confidence that you\u2019re headed back to 2% without any more influence from the fed funds rate or the labor market or some other feature that creates disinflation the other way,\u201d Barkin added.\u00a0<\/p>\n
The Richmond Fed chief was heartened by a rapid decline in gasoline prices in his district as the price of oil fell following a recent ceasefire agreement between the US and Iran. But he sees other forces contributing to inflation, including the build-out of artificial intelligence infrastructure. He said he\u2019ll need to see how the economy evolves over the coming months to determine the right path for policy.<\/p>\n
Fed officials left their benchmark federal funds rate unchanged at a meeting earlier this month. An increasing number of policymakers have warned the Fed may need to raise rates this year to reverse a pickup in inflation.<\/p>\n
Some of Barkin\u2019s colleagues have been particularly worried by rising prices for services, a part of the economy where inflation tends to be stickier. There\u2019s also concern that after more than five years of inflation being above the Fed\u2019s 2% target \u2014 and a topic of national conversation \u2014 consumer expectations for inflation could be affected, making the Fed\u2019s job of returning price stability more difficult.<\/p>\n
Read More:\u00a0Kashkari Says Fed May Need Rate Hike Amid Broad Inflation<\/p>\n
Price pressure from tariffs and the oil shock should now be waning, helping inflation cool, Barkin said. But at the same time, neither of those factors appeared to dent Americans\u2019 spending, which remained strong over the past year. In an economy that\u2019s driven by consumption, that could pose a headwind to bringing inflation all the way to the Fed\u2019s 2% target.<\/p>\n
Barkin also expressed concern about how businesses are behaving in the current inflationary environment.<\/p>\n
\u201cBusinesses, when they set prices, take today\u2019s inflation as a factor, and so I think there\u2019s some persistence to inflation,\u201d Barkin said. \u201cI do worry about that, and that\u2019s part of why I think being modestly restrictive is a reasonable place to be.\u201d<\/p>\n
He said companies are facing higher input costs, but they\u2019re also seeing consumers resist higher prices, and that\u2019s keeping a lid on how much of their higher costs firms can pass on.\u00a0<\/p>\n
In a recent trip to western Virginia, company leaders told Barkin they\u2019re still undecided about how much they\u2019ll raise employee compensation next year. When gas prices rose, they thought they might have to do larger-than-usual raises, but now that those prices have moderated a bit, they may no longer need to, he said.<\/p>\n<\/div>\n
#Feds #Barkin #warns #high #inflation #sees #signs #relief<\/p>\n","protected":false},"excerpt":{"rendered":"
Federal Reserve Bank of Richmond President Tom Barkin warned that inflation is too high, though he sees tentative signs that price pressures may moderate soon.\u00a0 \u201cThose numbers are too high,\u201d… <\/p>\n","protected":false},"author":1,"featured_media":9635,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[11590,666,4362,794,176,547,1006,1433,583],"class_list":["post-9634","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-barkin","tag-federal-reserve","tag-feds","tag-high","tag-inflation","tag-relief","tag-sees","tag-signs","tag-warns"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9634"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9634\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/9635"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}