Richmond Fed President Thomas Barkin expects further interest rate increases but favors a gradual pace. Cleveland Fed President Beth Hammack also prefers smaller, more frequent adjustments to bring inflation down.
Richmond Fed President Thomas Barkin said Thursday that he expects the central bank will have to raise interest rates further, though he is not sure by how much or at what pace. In a CNBC interview, he called inflation the most important risk right now.
According to CNBC's interview with Barkin: "Unemployment’s near record lows, and inflation is too high." He said the question is pace, and a gradual one still makes sense to him given uncertainty and the information policymakers expect to receive.
Fed holds rates after a September hike
Barkin's comments came a little more than a week after the Fed's policymakers voted to keep the benchmark overnight rate between 3.75% and 4%. When the committee approved a quarter percentage point hike in September, officials largely agreed another increase was likely before the end of 2026.
Barkin is not a voting member of the rate-setting committee now, but he will be in 2027. He said he considers current policy close to a neutral rate, neither restricting nor promoting growth.
Hammack also favors smaller steps
Cleveland Fed President Beth Hammack voiced a similar preference. Reuters reported that she prefers getting to a restrictive stance through more frequent smaller adjustments when possible, which she said would be less disruptive to households, businesses and financial markets.
Hammack, along with Fed Governor Lisa Cook, dissented in favor of a rate hike last week, according to Reuters. She did not say when she would like the Fed to next raise rates.
Markets are pricing in a better than 80% chance of a hike in December, then one more move in 2027, according to CME Group's FedWatch tool, as cited by CNBC.
Sources: CNBC, Reuters via Investing.com
Trading involves risk.
Risk Disclaimer
