Odd Lots Richmond Fed President Tom Barkin On Getting Inflation Under Control
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Apr 19, 2024 Tom Barkin, President of the Richmond Fed, shares his insights on the evolving economic landscape and inflation trends. He discusses whether recent inflation spikes represent a mere speed bump or a shift in trajectory, affecting Federal Reserve policies. Barkin emphasizes the challenges in achieving the target 2% inflation, while analyzing the impact of interest rates on housing supply. He also reflects on lessons learned from the 1970s inflation crisis and the importance of credibility in fiscal policy.
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Economic Outlook
- Demand remains robust, exceeding expectations of a slowdown, with strong retail sales and job reports.
- Inflation persists above 3% monthly annualized, but the overall trend still suggests moderation.
Inflation and Housing
- Housing strength may require offsets in other economic areas to achieve 2% inflation.
- Goods, services, or both need to see lower inflation if housing remains resilient.
Future Rate Hikes
- There's speculation about the hiking cycle not being over, with a potential for further rate increases instead of cuts.
- This would require observing a re-acceleration of inflation, not just a temporary uptick.