US Federal Reserve official says inflation not yet at target, more work needed

Richmond Fed President, Thomas Barkin, has stated that the Federal Reserve has more work to do in order to bring inflation down to its target of 2%. Barkin believes that the latest data on price pressures is not weak enough, indicating that there is still more to be done to get core inflation back down to desired levels.

In his interview with CNBC, Barkin said that while there was good news on energy, the core was still running at a little over 5% year-over-year. The U.S. central bank increased its benchmark interest rate by 25 basis points to a range of 4.75%-5.00% at its March meeting. However, recent banking turmoil has caused the bank to adopt a more cautious approach, with Barkin closely monitoring the situation.

While Barkin did not comment on whether he supported another rate hike at the Fed’s upcoming policy meeting on May 2-3, he emphasized the importance of remaining alert to jobs and inflation data, both of which remain relatively robust. Investors expect one more quarter percentage point rate rise at the Fed’s meeting next month, but also anticipate the central bank to reverse course by the end of the summer, with a few cuts expected by year-end.

Barkin believes that he is waiting for inflation to “crack”, and although it is moving in the right direction, he believes that there is still a long way to go before the Fed reaches its target. He believes that it is hard to make a case that the Fed is compellingly headed towards its target in the absence of a month or two with inflation at the desired level.

Thomas Elliott

Education: Brooklyn Law School, Brooklyn, New York. Pace University, White Plains, New York.
Professional Associations and Memberships: American Bar Association, New York State Bar, The Association of the Bar of the City of New York, Brooklyn Bar Association, National Academy of Elder Law Attorneys (NAELA).

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