MNI BRIEF: Fed's Barkin Supports Gradual Rate Hike Path

Richmond Fed President Tom Barkin Wednesday said the U.S. central bank is reducing "support gradually" so it can get policy back to a more normal position as the economic situation evolves, and only then the Fed can decide if it needs to put the brakes on the economy or not.

"The rate path we forecasted in March shouldn't drive economic decline. We're still far from the level of rates that constrain the economy," said Barkin, a 2024 FOMC voter, downplaying recessionary fears and commenting that the Fed's moves have less impact on inflation in the near-term. The Richmond Fed chief said "our balance sheet moves can work in the background to reinforce this rate path."

"We're still far from the level of rates that constrain the economy," Barkin said, leaving open the possibility of moving the fed funds rate above neutral to put a brake on the economy, should data, conditions, and movements in inflation expectations warrant it.