Federal Reserve Bank of Richmond President Tom Barkin said on Thursday that the bank's current moderately restrictive policy is a "good place to be" considering the uncertainty caused by the federal government policies, including United States President Donald Trump's tariffs.
"At our last meeting, the [Federal Open Market Committee] FOMC held the federal funds rate steady. With the labor market still solid and inflation still above target, our moderately restrictive stance is a good place to be. If conditions start to shift, we are well-positioned to adjust," Barkin said, noting that while the direction of the federal policy changes is known, their extent and how they "will net out" still remains uncertain.
Barkin also stated that while "one could imagine" that tariffs will have more of an impact on prices, in the context of high inflation, it is still unknown where the tariff rates will settle and what the response will be from the affected countries, businesses, and consumers.
