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Stephen Fa
Aug 03, 2023 9:42AM ET
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Fed's Barkin: Inflation still too high, hopes recent data is 'a sign'
Published Aug 03, 2023 08:24AM ET
© Reuters. A man arranges produce at Best World Supermarket in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File photo
(Reuters) - U.S. inflation remains too high, although recent readings showing price pressures have eased notably were welcome, Richmond Federal Reserve President Thomas Barkin said on Thursday.
"Certainly, last month’s inflation read was a good one and I hope it is a sign," Barkin said in remarks prepared for a speech in Virginia.
Barkin did not address the outlook for Fed policy in his prepared remarks other than to say "Inflation remains too high," echoing a refrain heard from most U.S. central bank officials who are wary of being too quick to declare "job done" in their task of bringing inflation back to their 2% target.
His remarks come just over a week after the Fed raised its benchmark short-term interest rate by a quarter percentage point to a range of 5.25% to 5.50%, the 11th increase in an aggressive policy tightening campaign it kicked off in March 2022.
Recent inflation data has pointed to notable progress. The Fed's preferred measure of inflation - the Personal Consumption Expenditures price index - was up 3% year-over-year in June, down from 7% a year earlier. Even more welcome for Fed officials, the rate stripped of food and energy costs, which they see as a better indicator of underlying inflation trends, came in at a lower-than-expected 4.1% after months of being stuck at 4.6%.
Barkin's prepared remarks focused largely on whether a recession is imminent. While not making an explicit prediction, he did say more slowing of economic activity "is almost certainly on the horizon."
That said, he argued that any downturn this time may be less severe than in the past and cause less loss of employment.
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