Richmond Fed Pres Barkin: Inflation Remains A Focus For The Fed

Republished By Plato

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Fed's Barkin (2024 voter) emphasizes that inflation remains the primary concern for the Federal Reserve

Says they are now looking to balance this focus with other aspects of the Fed's mandate, considering the progress made in reducing inflation.
Clarifies that the Fed's forecasts are not meant to be taken as guidance but are simply projections.
Downplays the optimistic Q3 GDP data, noting that his ground-level contacts do not reflect this level of growth.
Observations indicate that demand, employment, and inflation are stabilizing and not as excessively high as Q3 data suggested.
Remarks on the significant decrease in inflation and anticipates further cooling.
Notes that demand is normalizing but not dramatically declining.
The Fed is seeking strong evidence that inflation is returning to its target and notes signs of weakening in certain areas of the consumer economy.
Regarding potential rate cuts, Barkin states that if inflation decreases as anticipated, the Fed would respond appropriately.
Believes inflation is proving to be more persistent than most Fed officials think.
Feels that the Federal Reserve is well-positioned given the current economic outlook.
When asked about financial market conditions, he comments that the markets will behave independently.

Yesterday in an interview with WSJ Timiraos spoke toward cuts in 2024

Interest Rate Cuts Possible in 2024: San Francisco Fed President Mary Daly suggests that the Federal Reserve might need to consider lowering interest rates in 2024 due to the improvement in inflation this year.
Alignment with Fed's Median Projections: Daly's outlook on interest rates and inflation closely aligns with the median of projections from 19 Fed officials, who anticipate at least three rate cuts next year amid a faster-than-expected decline in inflation.
Acknowledging Inflation Progress: Daly acknowledges the progress made in controlling inflation, stating that even with potential rate cuts, the Fed's benchmark interest rate would remain restrictive.
Labor Market Concerns: Daly is closely monitoring the impact of restrictive policies on the labor market, emphasizing the need to balance price stability with job preservation.
Fed's Dual Mandate: Daly highlighted the importance of focusing on both aspects of the Fed's mandate: controlling inflation and minimizing labor market disruptions.

Since the Fed rate decision last week, officials have dialed back a bit on the rate expectations without not acknowledging the gains they have made. Perhaps, they are concerned about the sharp decline in rates which is a stimulus along with the failure stock prices which are also a stimulus. Both are threats to inflation, and officials are probably concerned about reigniting the inflation expectations.