Richmond Federal Reserve President Thomas Barkin shared his views on the current interest rates and the potential for changes in light of new tariffs.
Interest Rate Situation
Thomas Barkin noted that there is no need to hasten the cut of interest rates, as risks associated with new tariffs might influence inflation. He added, "These data do not force us to cut interest rates… I am very clear that we have not met our inflation target for four years."
Business Expectations
Businesses in Barkin’s district are expecting higher prices due to new tariffs that will take effect later this year. Barkin noted that unemployment remains low, around 4.2%, and companies are not showing signs of mass layoffs.
Disagreements Among Fed Members
According to new economic forecasts from the Fed, economic growth is expected to slow and inflation to increase. Opinions among Fed officials vary: seven believe there should be no rate cuts this year, while eight predict two cuts. Notably, Fed members Christopher Waller and Thomas Barkin have differing views, with Waller suggesting a cut in July and Barkin arguing that it's too early.
Overall, the Fed's priorities remain focused on maintaining maximum employment, though uncertainties related to new tariffs continue to impact its policy.
