MNI BRIEF: Fed's Barkin Open To Idea of Higher Neutral Rate

Richmond Fed President Thomas Barkin said Friday he is open to the idea that the neutral rate has shifted up "somewhat" even if some effects of Fed tightening have yet to be felt. 

A rise in r-star would mean policy is not as restrictive as thought, and that aligns with data showing the U.S. economy "has been much more resilient to rate increases than most expected and is likely to stay so as long as valuations remain elevated, and unemployment remains low," he said. 

"It is too soon to tell, but there’s one way to find out: Proceed deliberately while keeping a close eye on the real economy," he said in remarks prepared for a Global Interdependence Center event at the Banque de France in Paris. He did not comment on the timing of any potential rate cuts. (See: MNI INTERVIEW: Fed Will Stay Patient On Rocky Road To 2%-Evans)