Fed's Barkin (2027 voter) says consumer spending still seems resilient, do not see inflation expectations at risk of breaking out

Barkin's comments suggest a cautious outlook on inflation, implying little risk of a sudden spike in expectations, which aligns with the Fed's broader narrative.

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Fed's Barkin (2027 voter) says consumer spending still seems resilient, do not see inflation expectations at risk of breaking out

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  • Barkin expects slow progress on inflation, not a quick return to target
  • Goods firms feel pricing power is limited, but services firms feel they have it
  • Households and firms see oil shock as short-term
Context

His recognition of resilient consumer spending could mitigate fears of an economic slowdown, but the mixed signals regarding pricing power in goods versus services highlight ongoing challenges in achieving the inflation target. Traders should consider how this nuanced perspective may influence market sentiment and potential rate path adjustments going forward.

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