Fed’s Barkin
- Anecdotal info points to better labor demand and slowing growth
- Fed has time to see data before making next rate hike move
- Path for inflation is not yet clear, but sees clear progress
- Wage pressures remain but overall they have moderated
- Still seeking confirmation that economy is slowing
- Businesses see less pricing power but still willing to probe on price increases
- If recession arrives, it’s possible it would be milder than other downturns
- “I see an economy that is much further along the path to demand normalization.”
The ‘clear progress’ on inflation is an important point but he will wait to see if the anecdotal info shows up in hard data; it certainly didn’t in today’s retail sales report.
“The data will tell you demand is not weak,” he said. but “there is somewhat of a disconnect between the data and what I hear on the ground.”
Reminder that the Fed blackout starts on Saturday. Though with markets pricing only a 12% chance of a hike on November 1, there’s no real work for the Fed to do in order to manage expectations.