Fed's Barkin says Fed raised rates last week because risks to inflation outweigh risks to maximum employment

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US sells USD 69bln of 2yr notes: Tail 0.2bps

US Money Supply (Aug) 23.34T (Prev. 23.22T)

Fed's Barkin says Fed raised rates last week because risks to inflation outweigh risks to maximum employment

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  • Last week's rate hike 'will help' restore price stability, 'we'll see' if more hikes are needed.
  • Tempting to blame high inflation on ha andful of categories exposed to energy costs or tariffs, but much of the personal consumption expenditures index is climbing by more than 3%
  • Economic conditions 'are, if anything, firming'.
  • There is momentum outside data Centers and AI, with consumer spending holding up and strength in defense and manufacturing.
  • 'Passing' shocks like tariffs and energy are not fading, there is a risk that high inflation today will impact future inflation

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