Fed Barkin comments on US economy and monetary policy 🗽

Today, Thomas Barkin of the Federal Reserve commented on U.S. monetary policy and the state of the American economy. Here are the key points from his remarks:

• I currently see the monthly breakeven jobs rate in the range of 0 to 50 thousand new positions.

• The economy continues to expand, though not as strongly as in 2022 and 2023.

• The 2% inflation target has proven effective globally and enjoys broad support.

• It made sense to take action given the risks to the labor market.

• Incoming data will determine whether the Fed should cut rates further or not. The Federal Reserve needs to shift a bit more toward fulfilling its employment mandate.

• Unemployment looks somewhat shakier, but inflation conditions have improved.

• We cannot ignore the recent revisions to hiring data. The employment trend is beginning to move in the wrong direction.

• The key to sustaining consumer spending is whether people start losing jobs or not.

• The current level of the unemployment rate is not a concern, but the trend could be heading in the wrong direction.

• Consumer spending remains reasonably healthy among both higher- and lower-income households.

• The recent rate cut should support the labor market while maintaining pressure on inflation, which still remains above target.

• The Fed is now focused on balancing its objectives.

• Firms want to pass along higher costs – including those from tariffs – to consumers, but pushback from customers may limit how much they can do so.

• The labor market may be weakening, while at the same time the supply of workers is also growing more slowly.