Federal Reserve’s Barkin Warns Further Interest Rate Increases Are Necessary
On Friday, Richmond Federal Reserve President Thomas Barkin warned that further interest rate increases will be necessary to reduce price pressures.
Speaking to CNBC, Barkin said, “So we’re happy to see inflation start to move down [..] I’d like to see a period of sustained inflation under control, and until we do that I think we’re just going to have to continue to move rates into restrictive territory.”
According to the Bureau of Labor Statistics, headline consumer prices were flat in July while producer prices were down 0.5%.
However, this figure is just one month’s data, with CPI still up 8.5% on a year-over-year basis and the producer price index climbing 9.8%. Each of these figures is still notably over the Federal Reserve’s target of 2%, meaning the central bank must continue to push forward in order to meet this goal.
“You’d like to see inflation running at our target, which is 2% at the PCE, and I’d like to see it running at our target for a period of time,” Barkin commented.