Central bank officials are monitoring persistent price pressures after the Federal Open Market Committee recently held the benchmark borrowing rate between 3.75% and 4%. Barkin argued that adjusting monetary policy remains a straightforward necessity because current rates sit near neutral while strong consumption persists. He also pointed to artificial intelligence as a near-term driver of price pressures that should eventually aid productivity. Market indicators reflect high confidence in an upcoming December adjustment to further curb inflationary trends.
Key points
Policymakers consider inflation the primary economic risk requiring further monetary tigh…: Policymakers consider inflation the primary economic risk requiring further monetary tightening despite broader economic uncertainty.
Artificial intelligence is currently contributing to price pressures but is expected to e…: Artificial intelligence is currently contributing to price pressures but is expected to enhance productivity and lower inflation over time.
Markets are anticipating another potential interest rate increase in 2027 following expec…: Markets are anticipating another potential interest rate increase in 2027 following expected tightening before the end of 2026.
Sources checked by our analysis pipeline: 1
Richmond Federal Reserve President Thomas Barkin said Thursday that he expects the central bank will have to raise interest rates further, though he's not sure by how much or at what pace.
In a CNBC interview that was part of the Richmond Fed's 2026 CFO Summit, the policymaker expressed concern over inflation and said monetary policy will need to adjust.
"Unemployment's near record lows, and inflation is too high. That means the path is pretty straightforward. The question, of course, is pace," Barkin said in the talk with CNBC's Steve Liesman.
"Gradual makes sense if you think there's uncertainty in the world, and if you think that there's information you're going to get in the period. And I think that's still a pace that makes sense to me," he added.
Barkin's comments come a little more than a week after his colleagues voted to keep the Fed's benchmark overnight borrowing rate anchored in a range between 3.75% and 4%. While Barkin is not a voting member on the rate-setting Federal Open Market Committee now, he will be in 2027.
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