Richmond Fed President Thomas Barkin has voiced skepticism regarding the trajectory of inflation, even in light of today’s U.S. CPI data showing decline in headline and core readings. In his comments at a event, Barkin remarked, “I’m just not convinced that inflation is on some smooth glide path down to 2%.”
Barkin pointed out that the recent decrease in inflation figures is largely attributable to a partial reversal of the price spikes experienced during Covid-era, which were driven by elevated demand and supply shortages. He highlighted ongoing concerns, stating, “Shelter and shelter inflation remain higher than historic levels, so does services inflation.”
Emphasizing the resilience of businesses in the current economic environment, Barkin noted, “Businesses aren’t going to back down from prices until they have to,” suggesting that a slowdown might be necessary.
“I do see some sort of slowdown,” he added.
