Fed’s Barkin: No Rush To Cut, Can’t Dismiss Inflation Risks From Tariffs

Richmond Federal Reserve President Thomas Barkin said that there’s no rush to cut interest rates, given the still-unresolved risk that new import taxes might raise inflation, and with the U.S. job market and consumer spending holding up, Howard Schneider reported for Reuters.

Barkin’s comments come at a moment of heightened uncertainty for the Fed and the U.S. economy. I Photo: Federal Reserve Bank of Richmond

“I don’t think the data gives us any rush to cut... I am very conscious that we’ve not been at our inflation target for four years,” Barkin said in a Reuters interview, noting that businesses in his district still expect price increases later in the year as new tariffs take effect—and the fact that import duties may rise even further in the coming months.

He added that the jobless rate remains low at 4.2%, and firms don’t appear on the cusp of major layoffs that would undercut the Fed’s other goal of maintaining maximum employment.

“Nothing is burning on either side such that it suggests there’s a rush to act,” Barkin said in his first public comments following this week’s Fed meeting, at which the central bank held its policy rate steady in the current range between 4.25% and 4.5%.

“I’m not in a mood to ignore a spike in inflation were it to come... We’ll have to see if it comes. I’m comfortable with where we are... Core inflation is still over target. Being modestly restrictive is a good way to address that,” he said.

Barkin’s comments come at a moment of heightened uncertainty for the Fed and the U.S. economy.

Tariffs are already higher on some goods and could potentially increase again as soon as next month—when the Trump administration has set a July 9 deadline for other nations to either strike trade deals with the U.S. or face possibly exorbitant taxes on their goods.