Fed: Tariffs will not be translated uniformly into the economy – Thomas Barkin

Thomas Barkin, the president of the Richmond Federal Reserve Bank, expressed caution regarding the uncertainty of how rate increases could affect inflation in the US economy.

Key quotes

• Fed’s policy is well positioned where the economy could go.
• In the midst of uncertainty, the Fed has time to analyze the data.
• Inflation will be pressured up the rates.
• It does not expect a repetition of the inflation of the era of pandemic.
• The Fed faces risks both in the employment mandate and in inflation.
• Wait for the rates policy to continue changing.
• The prospects for the economy are still uncertain.
• Recent economic data have been solid.
• Recent inflation data are encouraging; The labor market is healthy.
• Companies are still in pause mode in the midst of uncertainty.
• It is well positioned where the economy could go.
• There is still a lot of uncertainty about how rates will be resolved.
• It is difficult for companies to know where the rates are.
• He does not believe that rates are as inflationary as some fear.
• Inflation expectations import a lot.
• He is not surprised to increase short -term inflation expectations.
• Rates will not be translated uniformly in the economy.
• Recent experience with inflation makes it more difficult to know what the prices will do.
• The Fed will act in politics according to how the data arrives.
• The exact moment of a Fed movement does not matter so much.
• The equilibrium point of the labor market is now back around 80k–100K per month.
• The Fed is always focused on its credibility and will act to defend it.
• The hiring and dismissal rates are quite low at this time.
• There are still shortage pockets in the labor market.
• The possible estimate of the neutral rate will increase over time.