Summary:
Barkin says central bank independence delivers better outcomes
Declines comment on political pressure facing the Fed
Inflation above target but not accelerating
Unemployment ticking up but remains contained
Businesses showing less appetite to pass through prices
Richmond Federal Reserve President Tom Barkin reinforced the importance of central bank independence on Tuesday, saying countries that safeguard monetary policy autonomy tend to achieve better economic outcomes, as political pressure on the U.S. Federal Reserve remains in focus.
Speaking in remarks reported by Reuters, Barkin declined to comment directly on recent political developments surrounding the Fed, referring instead to “stuff that’s been in the news.” His comments came after the Trump administration threatened potential legal action against Fed Chair Jerome Powell, an episode Powell has described as intimidation aimed at influencing monetary policy.
While avoiding the political controversy, Barkin said the economic evidence is clear that independent central banks deliver stronger and more stable outcomes. His remarks add to a growing chorus of Fed and other global central bank officials publicly defending institutional credibility and policy autonomy.
On the economic outlook, Barkin struck a measured tone. He said U.S. inflation remains above the Federal Reserve’s 2% target but does not currently appear to be accelerating, suggesting price pressures are easing gradually rather than re-intensifying. He also noted that unemployment has ticked higher but does not appear to be moving “out of control,” indicating continued resilience in the labour market.
Barkin highlighted a shift in business behaviour compared with early 2025. Unlike the first quarter of last year, he said he is no longer hearing strong conviction among businesses about passing higher costs through to consumers via price increases. That observation points to reduced pricing power and supports the view that inflation pressures may continue to cool without further aggressive policy tightening.
Taken together, Barkin’s comments reinforce the Federal Reserve’s prevailing message that monetary policy is well positioned, with inflation gradually easing and labour market risks contained. They also underscore a broader institutional stance: that maintaining central bank independence is critical not just for credibility, but for sustaining favourable long-term economic outcomes.
