MNI: Fed's Barkin Wants More Evidence Of Disinflation

Richmond Fed President Tom Barkin on Wednesday said he's happy to see less widespread inflation but is looking for further evidence that trend will continue, and the precise timing of interest-rate cuts is less important than the economic story behind such a move.

Barkin said he's "very encouraged by the broadening part" of recent slower inflation data and shelter costs took an "encouraging" step down in the June CPI. The job market "big picture looks healthy," Barkin said, acknowledging unemployment claims have been less positive, and adding that the "labor market could turn."

The Richmond Fed chief told reporters after speaking to the Greater Prince George's Business Roundtable in Maryland there are two-sided risks to inflation and unemployment. "When you start the process, I don't think any one 25 basis point cut matters too much one way or the other," he said. "I am trying to think through the question of when is it time to change the (policy) narrative from one of adjusting down to adjusting." (See: MNI INTERVIEW: Fed Cuts Near, Hiring Weaker Than Appears - Wilcox)

Asked about a potential Donald Trump administration and how fiscal largesse might impact monetary policy, Barkin said: "We have to make policy based on where we are today. I think it'd be very hard to make monetary policy today against an expectation of future fiscal policy."