Fed's Barkin (2027 Voter) says even before oil shock, progress on inflation was at risk of stalling, rates should be on hold; war and fast changes due to AI have clouded the economic outlook

Rates:

• Prudent to hold interest rates steady and await more clarity on what the Fed should do next.
• Oil price spike makes rate cuts unlikely this year. 

Inflation:

• Will be watching inflation and expectations data carefully. 
• Even before oil shock, progress on inflation was at risk of stalling. 

Economy:

• “Fog” obscures economic outlook. 
• Unemployment rate is low, but labor market feels “fragile”; firms see little wage pressure, multiple applicants for each job. 
• Demand has been steady but continues to feel “narrow,” based on AI investment and wealthier households. 
• Higher gasoline prices hit consumer sentiment, can crowd out other spending