Richmond's Barkin: Will "Look Through" Y/Y Inflation Rises

Richmond Fed Pres Barkin - arguably on the hawkish end of the FOMC spectrum - took a reasonably dovish stance at an event today, saying that he had not yet seen sufficient progress to warrant an asset purchase taper: "I want to get a good part of the way there before having the conversation about whether we've made substantial forward progress".

• As far as higher market yields are concerned, he said that they reflected more optimism on the economy, and that firming inflation expectations are "a good thing" as long as "they don't get out of whack".
• He also noted a few metrics that he is watching to assess economic developments. For one thing, he said he would "look through" annualized inflation spikes over the next six months (as they will be distorted by pandemic base effects), but will pay attention to other metrics, including trimmed mean inflation and M/M changes.
• Likewise with the employment to population ratio, which he said he "closely" follows as a measure of labor market slack (Fed Chair Powell among others has also pointed to this metric).
• The comments come after a number of notable comments Barkin made over the weekend, which alternatively could have been interpreted as both hawkish and dovish - including that it's straightforward for the Fed to keep its "foot on the gas", even though the US economy may be "on the brink" of a complete recovery.

Src: Dallas Fed, Census Bureau