Federal Reserve member Thomas Barkin commented US economy and monetary policy today. Here are the higlights:
- Fed cut rates are to recalibrate to a less restrictive position.
- The pace and extent of the rate-reduction cycle requires the Fed to be attentive to how the economy and inflation develop.
- Whilst a low-hiring, low-firing labor market could persist, demand for workers could also move higher if demand expands.
- Recent labor action and geopolitical conflict are also among inflation risks.
- I am watching closely how lower interest rates influence home and auto sales to see if demand risks outrunning supply.
- 50 BPS of cuts shown as the median Fed policymaker projection for the rest of this year would also take a little bit of the edge off rates.
- The Fed can't declare the inflation battle over. I expect little further drop in Core PCE Price Index until next year.
- 50 BPS rate cut in September was warranted because rates were 'out of sync’ with the decline in inflation and the unemployment rate near its sustainable level.
- The US debt level a source of concern over long-term rates
Source: xStation5
Economic calendar: US ISM manufacturing report 📈
Morning wrap (05.01.2026)
BREAKING: US December manufacturing PMI holds at 51.8; eases from 52.2 in November📌
BREAKING: S&P Manufacturing PMI data from the UK weaker than expected