Fed's Barkin – says a 75bp rate hike seems sensible


Federal Reserve Bank of Richmond President Thomas Barkin.

Barkin was speaking earlier on Tuesday in the US. He is at it again:

  • I am pretty comfortable that pandemic shocks will ease in time
  • Commodity shortage easing much more difficult to forecast
  • Fed’s rate path depends on supply issues abating and when that happens is very hard to know
  • We don’t look like we’ll have a repeat of financial crisis
  • My hope is if we have a recession as we normalize inflation that it will be mild
  • In current environment, there’s been a lot of movement already on long-term rates
  • Seemed sensible to respond to the recent inflation with change to 75 bps hike
  • Think it’s good at right times not to be ‘slave’ to your recent guidance and be nimble
  • We need to see if inflation settles around us
  • Soft landing is possible but so is a recession
  • I expect continued volatility around economic indicators
  • That could mean inflation readings go up and down, before stabilizing
  • Possibility we see more deglobalization and more labor shortages due to lack of immigration
  • That may mean we have more headwinds on inflation, risk am attuned to

Headlines via Reuters

This earlier from Barkin

Fed’s Barkin: Fed will do what it takes to reduce inflation

Fed will do what it takes to reduce inflation

Fed will do what it takes to reduce inflation

This article was written by Eamonn Sheridan at www.forexlive.com.



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