WASHINGTON, March 5 – A senior Federal Reserve official warned Tuesday that ongoing inflation concerns combined with robust employment figures could force the central bank to reconsider its policy approach, especially as international tensions threaten to drive consumer costs even higher.
Tom Barkin, who leads the Richmond Federal Reserve, told Bloomberg Television that recent economic indicators suggest a notable change from conditions that previously supported rate reductions. “The sense that the risks of the labor market were up while the risk to inflation were down” guided previous Fed rate cuts, Barkin explained. “The data that’s come in over the last couple months suggests it has moved in the other direction.”
Looking ahead to upcoming economic reports, Barkin expressed particular concern about inflation trends that show little sign of cooling. “With the PCE numbers that we’re expecting next week, you’ve got a couple months of relatively high inflation. That certainly puts pause to any conclusion that we’re done fighting this,” he stated, referencing the anticipated Personal Consumption Expenditures report that economists expect will show inflation remaining roughly one percentage point higher than the Fed’s 2% goal.
