Fed's Barkin: Rates Are Sitting Near Neutral, and Inflation Is the Risk
Richmond Fed President Tom Barkin says monetary policy is 'somewhere around neutral' and that a gradual approach makes sense. He flagged inflation as the central bank's biggest risk, with prices neither climbing nor cooling. Businesses, meanwhile, are wary of hiring but not firing, propped up by strong earnings.
Barkin doesn't think the Fed is fighting the economy anymore. The central bank's policy is sitting somewhere around neutral, the Richmond Fed president said Thursday at the 2026 CFO Summit, and moving in gradual steps just makes sense from here.
Where rates actually land isn't something he nailed down — 'somewhere around neutral' is as precise as he got. But the framing matters: it signals the Fed sees itself past the tightening phase rather than still dragging on growth.
Inflation is the thing keeping him up at night. Barkin called it the central bank's most important risk right now, and he isn't seeing much movement either way — not speeding up, not slowing down.
The labor market is stuck in a similar holding pattern. Companies are being careful about who they bring on, Barkin said, but they aren't cutting anyone loose either.
Why the reluctance to shrink headcount? Earnings are holding up strong, according to Barkin, and that's got businesses willing to keep investing and keep their workers rather than shed them.
Put it together and you get a Fed official arguing for patience: no dramatic pivots, no rush. Gradual is the word he keeps coming back to.
TopicsTom Barkin · Federal Reserve · Federal Reserve Bank of Richmond · 2026 CFO Summit
Source: breakingthenews.net
Written by Paparazzi with AI. Not financial advice.