Federal Reserve Bank of Richmond President Thomas Barkin said growth in US consumer prices is still too quick even as it slowed in June, reiterating the central bank’s commitment to restoring inflation to the goal rate.
(Bloomberg) — Federal Reserve Bank of Richmond President Thomas Barkin said growth in US consumer prices is still too quick even as it slowed in June, reiterating the central bank’s commitment to restoring inflation to the goal rate.
“Inflation is too high. Our target’s 2%,” Barkin said Wednesday in Arnold, Maryland. “If you back off too soon, inflation comes back strong, which then requires the Fed to do even more.”
Barkin spoke just after data showed US inflation decelerated last month to the slowest pace in more than two years, indicating more success for a Fed that’s been bearing down on price pressures. The consumer price index rose 3% in June from a year earlier, according to data out Wednesday from the Bureau of Labor Statistics.
The majority of Fed officials see interest rates moving higher to deal with a slower-than-expected cooling of price pressures and a persistently strong labor market. The Fed held policy rates steady last month, seeking to evaluate how the economy was responding to 10 straight increases and March’s banking turmoil.
Barkin, who doesn’t vote on rate decisions this year, has warned previously that premature policy easing could bring back stronger inflation. Fed Chair Jerome Powell said last month he wasn’t ruling out two consecutive hikes this year from the current range of 5% to 5.25%.
Barkin on Wednesday spoke to the Anne Arundel County Chamber of Commerce. Members of the Federal Open Market Committee will meet on July 25 and 26 for their next rate decision.
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