Fed's Barkin: Tariffs won't translate evenly into the economy

Thomas Barkin, the President of the Federal Reserve Bank of Richmond, expressed caution regarding the uncertainty of how tariff increases might affect inflation in the US economy. He mentioned that recent experiences with inflation during the pandemic and its aftermath create uncertainty about how things will unfold in the future.

Key Quotes

• Fed policy is well positioned for where the economy might go.
• Amid uncertainty, the Fed has time to take in data.
• Inflation will be pressured higher by tariffs.
• Doesn't expect a replay of pandemic-era inflation.
• The Fed faces risks on both job and inflation mandates.
• Expects tariff policy to continue to change.
• Outlook for the economy remains cloudy.
• Recent economic data has been solid.
• Recent inflation data is encouraging; the job market is healthy.
• Businesses still in pause mode amid uncertainty.
• Is well positioned for where the economy might go.
• Still lots of uncertainty about how tariffs will settle out.
• It's hard for businesses to know where tariffs stand.
• Doesn't think tariffs will be as inflationary as some fear.
• Inflation expectations matter a great deal.
• Not surprised to see near-term inflation expectations rise.
• Tariffs won't translate evenly into the economy.
• Recent inflation experience makes it harder to know what tariffs will do to prices.
• Fed will act on policy based on how data comes in.
• The exact timing of a Fed move doesn't matter that much.
• Job market break-even is now back to around 80K-100K per month.
• The Fed is always focused on its credibility and will act to defend it.
• Hiring and firing rates are quite low right now.
• There are still pockets of shortages in the job market.
• Possible neutral rate estimate will creep up over time.