Odd Lots Tom Barkin on Why Central Banking Is on Hard Mode Now
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Aug 25, 2025 Tom Barkin, President and CEO of the Federal Reserve Bank of Richmond, shares insights on today's complex economic landscape. He discusses the challenges central banks face, particularly in navigating labor market shifts and inflation pressures. Barkin emphasizes the less clear playbook for monetary policy right now, detailing the impact of improved supply chains on inflation and the cautious optimism emerging from consumer spending. He also reflects on the intersection of social responsibility and manufacturing, particularly in North Carolina's economic context.
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When Central Banking Gets Hard
- Tom Barkin says central banking is easy most of the time but hard when inflation and employment risks collide.
- He describes current conditions as that rare hard mode with conflicting signals on jobs and prices.
Hiring Slowdown Versus Low Unemployment
- Barkin highlights divergent labor signals: weak hiring but still low unemployment around 4.2%.
- He attributes the gap partly to low net migration and aging workers leaving the labor force.
Driving In Fog Analogy
- Barkin uses a driving-in-fog analogy to describe economic uncertainty and policy caution.
- He says the fog is lifting as businesses gain clarity on immigration, tax and tariff boundaries.