Barkin Sees Inflation Coming Into Range But Still Stickiness To Price Setting

Richmond Fed’s Barkin (’24 voter) wants to keep rate options open whilst focusing on data rather than the rate path. Inflation is "coming into range" of the target but there is still some stickiness to price setting behaviour. Full remarks here.

• Moving towards a soft landing: “Three-month average job growth, which hit 708k in 2021, is now 204k, moving toward its breakeven pace of roughly 100k. And inflation, which was 7.1%in June 2022, is now at 2.6%, coming into range of our 2% target.”
• However: “As I talk to businesses, I still hear too many planning above-normal price increases. After decades without pricing power, businesses, especially those facing margin pressure, won’t want to back down from raising prices until their customers or competitors force their hands. If that’s the case, I fear more will have to happen on the demand side, whether organically or through Fed action, to convince price-setters that the inflation era is over.”