Richmond Federal Reserve President Warns of Risks Amid Inflation Progress
Richmond Federal Reserve President and CEO, Tom Barkin, emphasized on Wednesday that while progress has been made in curbing skyrocketing inflation, there are still potential risks that could hinder a smooth economic transition.
Speaking at the Raleigh Chamber in Raleigh, North Carolina, Barkin acknowledged that the December Federal Open Market Committee (FOMC) meeting garnered significant attention. Although the committee decided to maintain the target range for the federal-funds rate at 5.25% to 5.50%, forecasts submitted by officials indicated that rate hikes were complete and that three quarter-point cuts were being considered for 2024.
However, Barkin highlighted the wide range of estimates, spanning from no cuts to as many as six. Rather than fixating solely on the rate path, he encouraged investors and Fed observers to take a broader perspective: Is inflation continuing its downward trend, and is the overall economy remaining stable?
Barkin also emphasized that the FOMC members, including himself as a 2024 voting member, are not operating on autopilot. He reiterated the message conveyed by several Fed policymakers in recent months that incoming data have a significant influence on meeting-by-meeting decisions.
"Forecasting is challenging, and conditions are constantly changing. As they evolve, so will our approach. So, be prepared for any outcome. That's the appropriate safety measure, even when expecting a soft landing," Barkin concluded.
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