Amid Uncertainty, Fed Stands Firm on Monetary Policy

Richmond Fed President Tom Barkin supports the Federal Reserve's 'moderately restrictive' monetary policy amid uncertainty and fast-changing U.S. government policies. He noted the potential impact of new tariffs on inflation but emphasized that sentiment and stability are crucial for economic growth and investment.

Richmond Fed President Tom Barkin emphasized that the Federal Reserve's 'moderately restrictive' monetary policy is appropriate under current conditions of uncertainty. Speaking at an economics lecture, Barkin noted that the rapid changes in U.S. government policy add to the unpredictability.

While Barkin did not directly address President Trump's newly announced 25% auto tariffs, he acknowledged that such measures could contribute to higher inflation. However, he also mentioned that other tax and regulatory policies might offset this impact.

Barkin highlighted the importance of consumer and business sentiment, cautioning that uncertainty could dampen demand. Despite this, Barkin remains confident in the Fed's current stance and indicated readiness to adapt should economic conditions require it.

(With inputs from agencies.)