Barkin: Interest Rates Must Remain Restrictive Until Inflation Targets Are Secured

Forex - Richmond Fed President Tom Barkin stated that upward risks to inflation and growth remain, emphasizing that the Federal Reserve's policy rate should remain restrictive until there is more certainty that inflation will return to the 2% target. Barkin noted, "Given the ongoing strength of the economy and the possibility of renewed wage and other price pressures, I believe the upward risk to inflation is greater than the downward risk." He added, "That’s why I find myself in the camp that wants to remain restrictive for a longer period." Barkin voted in favor of a 25 basis point cut at the December 18 meeting. The Richmond Fed President pointed out that they expect the 12-month inflation rate to decline in the coming months, especially considering base effects, stating, "The message from businesses is clear: consumers have become more sensitive to prices."