Fed’s Barkin: No Rate Cuts Needed While Economy Flexes Muscle
Markets itching for rate cuts just got a cold shower from Richmond Fed President Thomas Barkin. The central banker doubled down on the 'higher for longer' mantra—because why fix what isn't broken?
The punchline: Strong economy = no urgency to slash rates. Wall Street's rate-cut fantasy? Shelved until further notice.
Barkin's stance echoes the Fed's playbook: Keep policy tight until inflation bleeds out completely. Because nothing says 'confidence' like making traders sweat over every CPI print.
Cynical finance jab: Meanwhile, hedge funds still pricing in six cuts by December—because hope springs eternal in the land of leveraged bets.
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He added that unemployment remains stable at 4.2% while the risk of tariff-driven inflation still persists, explaining, “Being modestly restrictive is a good way to address that.”
Fed Members Differ on Rate Cut Timeline
Members of the Fed are split on whether to cut sooner or later. In an interview with CNBC’s Squawk Box on Friday, Fed Governor Christopher Waller said that the central bank is in a position to cut rates as early as July, although the process WOULD be slow instead of sudden in order to account for a potential resumption of inflation.
President TRUMP has urged the Fed to slash rates in order to lower interest payments on government debt. He believes that the rate should be at least 2% lower and argues that the Fed can just increase the rate if inflation returns. “He’s a political guy who’s not a smart person, but he’s costing the country a fortune,” said Trump in regard to Fed Chair Jerome Powell.
Stay up-to-date on the federal funds rate with TipRanks’ Economic Indicators Dashboard.
