Fed's Barkin (2027 Voter) says 2.8% productivity is still a pretty good number, via Bloomberg TV; are seeing companies invest in productivity

Newsquawk Staff · 5 Mar 2026, 13:53 UTC

Geopols

The text book monetary policy response would be to look through short term shocks.
Do not have a sense yet of the implications of the Iran war on the economy.
Gas prices still matter for sentiment and can crowd out other consumption.
If gas prices are up that is inflationary, and Fed will have to decide how long that lasts.

Inflation

Recent inflation data does raise doubts about whether the Fed is finished its inflation fight.
Seen a couple months of relative high inflation.

Employment

Last couple months of employment data has been reassuring.

Policy

Believes that policy is modestly restrictive, but demand remains healthy.
The Fed will go meeting-by-meeting.

Balance sheet

Instinctively likes the idea of a smaller Fed balance sheet, but subject to not having adverse market reactions and being able to control interest rates.

What it means

Richmond Fed President Barkin's comments indicate that while productivity growth is positive, concerns about persistent inflation suggests the Fed may not be done tightening rates. This sentiment could influence market expectations regarding future Fed actions and may lead to adjustments in USD valuation and fixed-income assets as investors gauge the balance between inflation control and economic health.

What our latest note said

US Market Open, 28 Oct, 10:34 UTC · what it led with

NQ futures outperform following SK Hynix's upbeat earnings.
DXY flat; NZD hit after the RBNZ unexpectedly held rates steady.

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Case studies

Headlines that moved markets

Headlines from our feed, and what the market did next.

Riksbank maintains its rate at 1.75% as expected; assesses that the probability of a rate increase later this year remains; there is considerable uncertainty and developments call for vigilance
EUR/SEK+0.3%
Norges Bank maintains its rate at 4.25% as expected; may still become necessary to raise the policy rate
EUR/NOK+0.6%
US President Trump expected to remove some tariffs on Canada in a bid to help Senator Susan Collins, WSJ reports.
USD/CAD−0.2%

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