Richmond Fed President Barkin calls for caution

“We need to continue to raise interest rates more cautiously than we did last year,” Richmond Fed President Thomas Barkin said. The central bank needs to keep raising interest rates and keep them elevated to bring inflation down over time. “Inflation is probably past its peak. But I think it’s going to take time to get back to target, and I think we still have work to do,” Barkin said at an event at Stanford University. Barkin is not a voting member of the Federal Open Market Committee this year. “The beauty of a shallower rate of rate hike is that if you’re wrong, you’re not that wrong,” he said during a question-and-answer session after his speech. He noted that employment and consumption remained strong in early readings this year. Barkin noted that the unemployment rate, which was 3.4% in January, was the lowest in 54 years. “The labor market is still very tight. “It’s probably going to take a lot more time and effort to get prices back to the stability of the last 30 years,” he said. Barkin, who opposed the Fed’s proposal to raise its inflation target to 3% and said he didn’t see any reason to do so at this time, didn’t say how big a rate hike he supports when the Fed meets March 21-22, but he did emphasize the benefits of some deliberation. “Being on a more cautious path gives you a lot more flexibility in terms of being able to go longer or go higher if necessary,” Barkin said.