Fed’s Barkin: More demand moderation needed

Richmond Fed President Thomas Barkin’s said overnight that the pace of disinflation has possibly stalled. “We’re going to need a little more edge off of demand to get all the way” back to target, he added. Despite these challenges, he expressed optimism regarding the current level of the benchmark policy rate, indicating confidence that it will effectively address inflation.

“I still have the weight going toward inflation,” Barkin said. “It’s a stubborn road back…It doesn’t mean you won’t get it back. It just means it takes a while…to corral price setters into believing they don’t really have a chance” for aggressive increases.

Separately, New York Fed President John Williams affirmed that “eventually we’ll have rate cuts”. But for now, monetary policy is in a “very good place.” He refrained from providing a specific timetable for rate adjustments but noted that the economy is gradually returning to better balance amid a shift to a slower rate of growth. He anticipates GDP growth in the range of 2-2.5% for the year.