Richmond Fed President Thomas Barkin voiced his perspective on the importance of adhering to its 2% inflation target today. He emphasized the paramountcy of maintaining the institution’s credibility with the public, noting, “We have one big weapon and that is credibility.”
Elucidating on the choice of the 2% benchmark, Barkin said, “There is nothing magic about 2 except that when you set that as a target you probably want to achieve it.”
In the broader discussion on the economy, Barkin offered a tempered view. Should the US head into a recession, he anticipates it to be on the “less-severe” side of the spectrum. Moreover, he indicated that while the Fed remains vigilant, it aims to not get overly swayed by transient market fluctuations.
