- Still an open question on whether Fed needs to hike or if inflation is already on a path lower
- There are reasons to think price pressures are embedded, with either weakening demand or a rate hike needed
- There are strong arguments that inflation will ease, given modest wage pressure and tariff, oil and other shocks likely to subside
- Employment continues to keep up household spending while those who own homes or equities have enjoyed remarkable wealth increase
- Aspects of US economy remain a mystery as consumers and overall activity defy shocks
- Does not say if he thinks rates will need to rise but notes that “many” at the Fed feel current level is restrictive enough to bring inflation down
Barkin is a good barometer for the Fed so I take these comments very seriously and it sounds to me like there’s an emerging to consensus to hold rates rather than to cut. Of course that can change with another month of data or some other shock.
This article was written by Adam Button at investinglive.com.