Recent US inflation reports have been encouraging, but the rate of increases in prices is still too high to ease off monetary restraint, Federal Reserve Bank of Richmond President Thomas Barkin said.
(Bloomberg) — Recent US inflation reports have been encouraging, but the rate of increases in prices is still too high to ease off monetary restraint, Federal Reserve Bank of Richmond President Thomas Barkin said.
“I would want to see inflation convincingly back to our target” before easing up on rate hikes, Barkin said in an interview with Fox Business Tuesday. “You just can’t declare victory too soon.”
Median projections show policymakers see rates rising to above 5% this year, and officials are largely expected to raise rates by a quarter point when they meet next on Jan. 31 to Feb. 1.
Price growth measured by their preferred index rose 5.5% for the year ending November, and 4.7% minus food and energy. The main gauge was as high as 7% in June, compared with the target of 2%.
“I want to see inflation, and median and trimmed mean, compellingly headed back to our target,” Barkin said. “As long as inflation stays elevated, we need to continue to move the needle, to tighten if you will, ever more.”
Policymakers rapidly raised interest rates last year from near-zero levels in March to a range of 4.25% to 4.5% in December in an effort to tame the strongest inflation in a generation.
This year, Barkin is a non-voting member of the Federal Open Market Committee, which sets interest rates.
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