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Federal Reserve Bank of Richmond President Tom Barkin said fresh inflation data show the central bank continues to see progress on lowering inflation toward its 2% goal, but that interest rates should remain restrictive.
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Bloomberg News
Amara Omeokwe
Published Jan 15, 2025 • 1 minute read
(Bloomberg) — Federal Reserve Bank of Richmond President Tom Barkin said fresh inflation data show the central bank continues to see progress on lowering inflation toward its 2% goal, but that interest rates should remain restrictive.
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New consumer-price data “continues the story we’ve been on, which is that inflation is coming down toward target,” Barkin told reporters following an event in Annapolis, Maryland. “But there’s still work to do.”
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Barkin’s comments follow fresh consumer price data released earlier Wednesday. The so-called core consumer price index, which excludes food and energy costs, increased a less-than-forecast 0.2% in December after rising 0.3% for four straight months.
The Fed lowered its benchmark interest rate at three consecutive meetings beginning in September, including by a quarter point at its most recent gathering in December. Barkin is among Fed officials, including Chair Jerome Powell, who have signaled they’d prefer a more gradual pace of cuts this year as the central bank looks for more progress on lowering inflation.
“I do still think we need to be restrictive to seal the final mile, if you want to put it that way, back to 2%,” Barkin said.
Meanwhile, the labor-market figures released earlier this month showed US hiring ended 2024 on a high note and unemployment edged lower.
Fed officials anticipate two interest-rate reductions this year, according to the median estimate released last month. Investors widely expect officials to hold interest rates steady at their Jan. 28-29 meeting, according to futures markets.
Barkin, who does not vote on Fed interest-rate decisions this year, made the comments after delivering remarks similar to a speech he gave at a separate event on Jan. 3.
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