Free Trial

FED: Barkin Advocates “Test and Learn” Approach To Rate Cuts

FED

Reuters have run headlines from Richmond Fed’s Barkin (’24 voter) from his appearance on Bloomberg’s Odd Lots podcast that are quite different in tone from Bloomberg’s selected quotes from it.

  • Reuters picks out that the current “low-hiring, low-firing” approach that companies are currently taking to employment is unlikely to persist and warns of potential layoffs if the economy weakens.
  • Disinflation has spread beyond just goods to the rest of the economy, boosting his confidence that it will continue.
  • He advocates a “test and learn” approach to rate cuts.

That compares with Bloomberg’s write-up which noted upside risks for inflation, though he supports “dialing down” interest rates in the face of a cooling labor market. “I actually think a large part of the economy is standing in readiness for the rate-reduction cycle to start […] There’s a lot of demand out there and that’s both good news, if you’re worried about the economy or employment; it’s also risky if you’re worried about inflation”

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.