Fed Gov. Barr is speaking (voting member) and says:
Uncertainty about both inflation and jobs warrants a cautious approach to any further interest rate cut
Possible that tariffs have only a modest impact on inflation, but there are also risks of persistent inflation and rising inflation expectations
Fed’s inflation goal faces significant risks, but also some factors that might mitigate those risks
Expects core personal consumption expenditures price index over 3% at end of this year
Skeptical that the Fed can completely look through tariff-driven inflation
Two more years would be a long time for consumers to wait for inflation to return to 2%
Low payroll growth could be a sign of worse to come, but sound continued growth and resilience could also lead to stronger hiring
Rate cut in September was appropriate, current policy rate still modestly restrictive
Since Fed’s September meeting consumer spending has been strong, stronger PCE inflation has been confirmed, and new tariffs announced
Modest impact of tariffs on inflation so far likely means period of adjustment will continue longer as firms adapt
Hard to judge at this point whether federal government shutdown will leave an imprint on overall economy
Current outlook poses challenges for judging stance of monetary policy and deciding the right path forward
Recent spending data suggest GDP growth remained strong in the third quarter
Fact that job market balance is coming through slowing supply and hiring suggests vulnerability to shocks
Barr comes across as more hawkish (less dovish) than dovish:
He clearly prioritizes inflation risks, downplays the case for further immediate easing, and stresses caution.
His tone is not aggressively hawkish (he doesn’t call for hikes), but his skepticism about cuts and insistence on watching inflation make him hawkish-leaning neutral.
