Fed's Barkin says economy may be firming, inflation not limited to energy, tariff shocks

Fed's Barkin says economy may be firming, inflation not limited to energy, tariff shocks

Fed's Barkin says economy may be firming, inflation not limited to energy, tariff shocks

Federal Reserve Bank of Richmond President Thomas Barkin looks on at the Economic Club of Washington DC in Washington, D.C., U.S., April 9, 2025. REUTERS/Kevin Mohatt

By Howard Schneider

Tue, September 22, 2026 at 7:52 PM GMT+3 2 min read

By Howard Schneider

BALTIMORE, Sept 22 (Reuters) - US economic conditions "are, if anything, firming," with continued consumer spending and strength beyond the ‌boom in artificial intelligence keeping the Federal Reserve's focus on inflation, ‌Richmond Fed President Tom Barkin said on Tuesday.

"The risks to inflation outweigh the risks ​to maximum employment. That's why we raised rates," at last week's meeting, Barkin said in comments prepared for delivery to the CFA Society Baltimore, adding that the quarter-percentage-point hike "will help" restore inflation to the Fed's 2% target.

"Will ‌additional hikes be required, ⁠and how many? We'll see," said Barkin, who is not a voting member of the central bank's rate-setting ⁠Federal Open Market Committee this year.

The Fed last week raised its policy interest rate to the 3.75%-4.00% range, with investors anticipating more increases.

Barkin's comments follow ​those of ​other Fed officials who have broadened ​their concerns about inflation that ‌they feel is being driven increasingly by strong demand in the economy, and not just by energy, tariff and other supply issues that might be expected to fade on their own.

Even those "'passing' shocks aren't proving to be short-lived, or one-off events," but are producing more persistent price ‌pressures than at first expected, Barkin said.

"It ​is tempting to try to blame high ​inflation on a handful ​of categories with particularly high exposure to the Middle ‌East conflict or to tariffs," he ​said. But much of ​the Personal Consumption Expenditures Price Index is increasing at greater than a 3% annual rate.

"I am hearing momentum outside of data ​centers, too. The defense ‌sector is hot. Manufacturing contacts are starting to sound more ​upbeat. Bankers tell us pipelines are healthy," Barkin said.

(Reporting by ​Howard Schneider; Editing by Paul Simao)