Fed's Barkin: Rate Hike Direction Clear, AI Risks Require More Caution in Policy Pace

Odaily Report: Richmond Fed President Tom Barkin stated that with U.S. demand remaining healthy and inflation stubbornly elevated, the direction of monetary policy is relatively clear, but risks to the demand outlook persist, and the Fed should remain cautious when adjusting policy. Barkin's remarks in South Carolina signaled that interest rates still need to rise, while emphasizing that the pace of hikes must be prudent. He delivered the speech to the Greater Greer Chamber of Commerce that day and will become a voting member of the Federal Open Market Committee in 2027.

In September, the Fed unanimously agreed to raise rates by 25 basis points, lifting the federal funds rate target range to 3.75% to 4%; in October, it voted 10-2 to keep rates unchanged, stating that more information was needed to assess the appropriate level of policy. He expects consumer spending to remain resilient through the end of the year, with the market widely anticipating a strong holiday shopping season, but how long the strong consumption momentum can be sustained remains a question.