The President of the Federal Reserve Richmond, Thomas Barkin, said Thursday that he is satisfied with the current path set by the FOMC of assessing whether a 25 basis point rate hike is necessary at each meeting. According to Barkin, households have a lot of money to spend.
Notable Statements:
“The challenge in assessing the current economy is to reconcile the strength of the recent data with the possible weakness coming from the banking system.”
“Policy will have to be nimble. If inflation persists, we may react by raising rates further. If I’m wrong about the price dynamics at play, or about credit conditions, then we can respond appropriately.”
“Tightening credit conditions, coupled with the lagged effect of our rate moves, may bring inflation down relatively quickly. But I still think inflation could take time to return to target.”
“Let me now turn to our most recent meeting. I saw substantial inflationary pressure and a resilient banking system. That is why I have supported a 25 basis point rate hike. I am heavily influenced by the experience of the 1970s. If you go back in Inflation too soon, inflation comes back with a vengeance, forcing the Fed to do even more, with even greater damage. With high, widespread, persistent inflation, I didn’t want to take that risk.”
“If inflation persists, we can react by raising rates further. Just a few weeks ago some were calling for a 50 basis point hike. And if I’m wrong about the price dynamics at play, or about credit conditions, then we can respond appropriately. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
