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Fed’s Barkin Says More Data Needed Before Rate Hikes Appropriate by Reuters


© Reuters. FILE PHOTO: Richmond Federal Reserve Bank President Thomas Barkin poses during a break at a Dallas Fed technology conference in Dallas, Texas, USA, May 23, 2019. REUTERS / Ann saphir

(Reuters) – Richmond Federal Reserve Chairman Tom Barkin said on Thursday that the US central bank has cleared the way for what it hopes is a “smooth” start to a reduction in its support for the economy, but that it will take longer to determine when it will be appropriate to raise interest rates.

“We still have a lot to learn about whether recent inflation levels will hold up and how much room we have to run in the job market until we hit maximum employment,” Barkin said in a statement prepared to deliver to the Forecasters Club of New York. . “As COVID-19 eases, I hope the answers to these questions will be clearer.”

Fed policy makers feel that labor markets have recovered enough to begin to reduce their support for the US economy “soon” during the crisis era, and probably in the middle of next month, according to they showed the minutes of the policy meeting from September 21-22 on Wednesday.

That language provided the “early” warning the central bank had promised to give before beginning to cut its $ 120 billion in monthly purchases of Treasuries and mortgage-backed securities, Barkin said in his comments.

About half of the Fed’s policymakers believe the central bank will have to start raising interest rates by the end of next year, forecasts published on Sept. 22 showed, and all but one believe it will be. necessary by the end of 2023. not to disclose individual interest rate forecasts from policymakers, or the economic assumptions on which they are based.

Barkin said Thursday that he would like to provide that information.

“Doing so would provide a clearer picture of the individual reaction role of each member of the FOMC (Federal Open Market Committee) and as a whole, this could help shed more light on the overall reaction role of the Fed,” he said .

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