Fed Has Time To Be Patient On Cutting Interest Rates, Barkin Says
Federal Reserve Bank of Richmond President Thomas Barkin reiterated policymakers have time to be patient about the timing of rate cuts, pointing to a strong labor market and continued disinflation.
(Bloomberg) -- Federal Reserve Bank of Richmond President Thomas Barkin reiterated policymakers have time to be patient about the timing of rate cuts, pointing to a strong labor market and continued disinflation.
“It’s a very strong labor market still, and so gratified to see inflation coming down, hoping it continues to come down,” Barkin said in an interview Thursday on Bloomberg Television. “I think we’ve got some time to be patient.”
Barkin, who is a voting member of the Fed’s policy-setting committee this year, added they’ll get “a few more months” of inflation data and that he “would very much like to see that trend continue and broaden.” He noted the outsized role goods have played in the pullback in US price growth.
The Fed held interest rates steady for a fourth straight meeting last month. Chair Jerome Powell and other officials have doused expectations for a cut as soon as March, saying the policy committee wants to see more data to gain confidence that inflation is on a sustained path to 2%.
Read More: Fed Officials Add to Chorus Tempering Hopes for Rate Cuts Soon
The Fed’s preferred inflation metric ended 2023 at 2.6%, after peaking at a 7.1% annual pace in 2022. The central bank’s target is 2%.
The deceleration occurred amid resilient growth with little disruption to employment. The Bureau of Labor Statistics reported Friday that nonfarm payrolls rose by 353,000 jobs in January. The unemployment rate stood at 3.7% and has held below 4% for about two years.
Fed officials in December predicted they would reduce the benchmark lending rate three times in 2024, according to the median estimate.
--With assistance from Michael McKee.
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