According to the Richmond Fed’s Barkin, inflation remains too high and expects the economy to slow

By Jeffry Bartash

Barkin is not convinced a recession is imminent

Richmond Federal Reserve President Tom Barkin said the US has largely avoided a recession due to pandemic-related changes in the economy, but growth is likely to slow due to higher interest rates.

“There is almost certainly a further slowdown on the horizon. A suite of pandemic-era fiscal support programs rolls out of Blacksburg, Virginia Thursday morning.

In a prepared text, Barkin also said inflation “remains too high,” but gave no indication of whether he would support another rate hike at the next major Fed meeting in September.

Barkin is not a voting member of the Fed’s rate-setting committee this year.

The Fed last week raised a key short-term interest rate for the 11th time in less than half a year. The rate rose from almost zero in spring 2022 to a peak of 5.5%.

The central bank has tried to curb inflation without plunging the economy into recession. Higher borrowing costs typically slow economic growth.

The Fed is still debating whether to raise rates again in September.

-Jeffry Bartash

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08-03-23 ​​0825ET

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