Federal Reserve Bank of Richmond President Thomas Barkin said the central bank needs to continue to raise interest rates to bring down too-high inflation, without giving an opinion on the size of the hike planned later this month.
(Bloomberg) — Federal Reserve Bank of Richmond President Thomas Barkin said the central bank needs to continue to raise interest rates to bring down too-high inflation, without giving an opinion on the size of the hike planned later this month.
“The Fed has moved aggressively to bring inflation down by raising interest rates and reducing our balance sheet,” Barkin said Wednesday in a speech on the labor market in Columbia, South Carolina. “We’ve seen some progress but at 5.5% inflation remains well above the Fed 2% target, and as a result we’ve made clear we still have work to do.”
Fed Chair Jerome Powell in Senate committee testimony Tuesday said the Fed might accelerate the pace of interest rate hikes and raise rates to a higher peak than previously expected this year amid signs of a stronger economy. Powell will testify Wednesday before the House Financial Services Committee, where he’s expected to repeat the same message.
Barkin said the labor market has been “unbelievably healthy,” and said structural changes, such as an aging population, might mean the job market remains tight over a longer period.
He said inflation hurts everyone but singled out lower-income Americans as especially vulnerable.
“As inflation hit a 40-year high, it impacted everyone and it reminded each and every one of us how confusing, how exhausting and how unfair inflation can be,” he said. “I’m sure many of you have witnessed first-hand the impact that inflation’s had on the most vulnerable in our communities who spend most everything they make. And so higher prices affect them more than anybody else.”
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