Fed's Barkin says U.S. faces risks to both Fed mandates

Richmond Fed president Tom Barkin said future interest-rate moves must be finely tuned because risks affect both unemployment and inflation; he added that rates are within estimates of neutral after a December quarter-point cut.

Tom Barkin, president of the Richmond Federal Reserve, said on Tuesday that future interest-rate decisions will need to be finely tuned to incoming data because risks now touch both unemployment and inflation. He spoke to the Raleigh, North Carolina Chamber of Commerce and noted that inflation remains above target while unemployment has ticked up from historic lows. Barkin described interest rates as within the range of estimates of neutral and recalled that the Fed reduced its benchmark rate by a quarter of a percentage point in December before indicating a likely pause. He also said the economy has shown resilience but that both downside and upside risks remain. What was reported: - Barkin said both unemployment and inflation need close monitoring and that policy will require finely tuned judgments. - He described interest rates as within the range of neutral estimates and noted the Fed cut rates by 25 basis points in December, with officials signaling a pause on further reductions. - Barkin said recent job growth and demand have been narrow, concentrated in a few industries, while other underlying dynamics have supported resilience. - The article notes Barkin is not a voter on Fed rate policy this year. Summary: Barkin framed the policy challenge as balancing risks to both sides of the Fed's dual mandate and described the current stance as near neutral following December's quarter-point cut. Undetermined at this time.