WSJ's Take On the Week Why This Fed President Is in No Rush to Cut Interest Rates
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Jul 2, 2025 Tom Barkin, President and CEO of the Federal Reserve Bank of Richmond, shares insights on navigating today’s economic complexities. He discusses the Fed's cautious approach to interest rates amidst pressures and political influences. Barkin compares the economy to 'driving through fog,' urging patience. He explores consumer sentiment's surprising strength despite inflation and highlights the impact of AI on the job market. Barkin also assesses potential recession risks, emphasizing the resilience of the U.S. economy and the unpredictable nature of current economic forecasting.
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Economy Is Like Driving Through Fog
- The economy is like "driving through fog" with high uncertainty from taxes and tariffs.
- Businesses hold steady, neither braking nor accelerating, waiting for clarity before acting.
Consumer Spending Defies Sentiment Drops
- Consumer spending remains solid despite falling sentiment driven by inflation worries.
- Sentiment fears about inflation don't strongly translate into cuts in consumer spending.
Tariffs Impact Prices With Delay
- Tariff effects on prices will likely show up around summer after delay due to inventory lags.
- Retailers are hesitant to raise prices swiftly due to exhausted consumers, resulting in a pricing "cage match."