Fed’s Barkin says possibility of rate hike still ‘on the table’

January 03, 2024 07:05 AM PST | By Invezz

Fed’s Barkin says possibility of rate hike still ‘on the table’ — Image source: Invezz

Risks that Barkin sees ahead

Barkin recommends caution as the U.S. economy could “run out of fuel”.

The Fed official also cited geopolitical tensions and “unexpected turbulence” like another shock to the banks for his view in his speech in Raleigh, North Carolina.

Thomas Barkin also said that it’s not entirely unlikely that inflation ends up holding above the 2.0% target. The Fed’s preferred inflation gauge stood at 3.2% in November as Invezz reported here.

Note that his remarks are in contrast with the “dot plot” that recently signalled three rate cuts in 2024. S&P 500 is currently up 14% versus its low in late October.

Watch here: https://www.youtube.com/embed/raru4zLy6zM?feature=oembed

Progress on inflation has been good

Thomas Barkin did, however, agree that progress on inflation has so far been promising. In fact, PCE now stands at 1.9% on a six-month basis.

We’re making real progress. Everyone is talking about potential for a soft landing, where inflation completes its journey to normal levels while economy stays healthy. And you can see the case for that.

It is worth mentioning here that the U.S. central bank decided in favour of leaving interest rates unchanged in all three of its most recent meetings.

Later today, the Federal Open Market Committee will release minutes of its meeting on December 12-13 which will further detail the policy makers stance on interest rates.

The post Fed’s Barkin says possibility of rate hike still ‘on the table’ appeared first on Invezz

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