Fed’s Barkin Cites ‘Close Call’ on Rates, ‘Weak Balance’ in Labor Market

• Richmond Fed President Barkin calls rate decision a “close call.”
• Uncertain if current rates are restrictive enough for 2% inflation target.
• Describes labor market as in “weak balance” with low hiring and firing.

Richmond Federal Reserve President Tom Barkin stated on Friday that the determination of whether current interest rates are sufficiently restrictive to achieve the 2% inflation target remains a “close call.” Barkin expressed uncertainty regarding the necessity for further monetary tightening, noting that price pressures are spreading unevenly across the economy. He also indicated he was unsure if he would have supported the three Federal Reserve officials who dissented in favor of a 25 basis-point rate hike at the recent policy meeting where rates were held steady. Regarding the labor market, Barkin characterized it as being in a “weak balance” with “low hiring alongside low firing,” describing it as a “zero-to-modest gain jobs environment” that has persisted for the past year. He added that he is monitoring strong corporate earnings for their potential impact on employment figures.