Fed should move policy 'with care' as it responds to inflation, Barkin says
TLT•Richmond Fed President Tom Barkin said the central bank should move monetary policy “with care” as it responds to inflation, which he called the greatest risk. He said he had no base case for the December meeting and noted that businesses face rising costs and plan to pass them along.
1. No December base case
Barkin said he would wait for more inflation and jobs data before deciding what should be done at the Fed’s December meeting. Investors expect the Fed to raise rates at its December 8-9 meeting.
2. Inflation and employment risks
Barkin said businesses continue to face rising costs and are planning to pass them along. He called inflation the greater risk to the Fed’s dual mandate, but said policymakers should move carefully because risks could affect the labor market. He said AI could either curb investment, stock prices and consumer spending if it underdelivers, or displace more workers than expected if it overdelivers.
