In a recent interview with Bloomberg Television on Thursday, Thomas Barkin, Richmond Federal Reserve Bank President, expressed concerns over the potential economic disruptions that could stem from a possible government shutdown. This has led to uncertainty about another interest-rate hike. Barkin, who is not voting on policy this year, anticipates further insights into the economy and inflation in the near future.
Barkin referenced the current benchmark rate which stands between 5.25% and 5.5%. He also acknowledged the Federal Reserve's 2% inflation goal and the rising bond yields. Despite these figures, he pointed out that 12 of 19 officials still favored another rate hike.
The labor market, according to Barkin, has shown strength with businesses showing reluctance for layoffs. However, he said that a softening of the labor market would be required to curtail inflation.
Looking ahead, Barkin mentioned projections for rates going above 6% next year. Additionally, he indicated that fewer cuts are anticipated in 2024. These projections and the current economic landscape underscore the uncertainty surrounding future monetary policy decisions amidst potential disruptions such as a government shutdown.
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