Federal Reserve Bank of Richmond President Thomas Barkin shared on Tuesday in prepared remarks at a real estate roundtable that the United States central bank is walking a "fine line" when it comes to overcorrection and undercorrection.
"If we undercorrect, inflation re-emerges. If we overcorrect, we do unnecessary damage to the economy. And even the best policy has the potential to be waylaid by external events," Barkin said, referring to the latest events taking place in the Middle East.
The policymaker stated that the Fed still has time to see the data before deciding on its next monetary policy move. He noted that although the inflation path is still unclear, it is evident that progress has been made. He concluded by saying that if a recession does happen, "the economy should find itself less vulnerable."
