MNI BRIEF: Barkin-Fed Can Take Its Time Amid Strong Employment

Richmond Fed President Tom Barkin on Thursday said the central bank should take its time to assess whether recent hot inflation is a real shift or a bump along the way, while the labor market remains strong.

He is looking for disinflation to be sustained and broadened, although he believes price-setters have seen reduced pricing power. “The labor market is giving us time,” he told the National Council of Textile Organizations, noting data in the first quarter has been a “little less encouraging.”

The Richmond Fed president said he doesn’t see the economy as overheating and downplayed the risk a rate cut would spur further inflationary pressures. “I don’t think businesses are as frothy as markets are," he said, when asked about potential exuberance hindering the Fed when it decides to reduce interest rates.