Barkin Says Appropriate Direction of Monetary Policy Relatively Straightforward

By Jessica Coacci

Richmond Fed President Tom Barkin said with demand healthy and inflation stubbornly elevated, the appropriate direction of monetary policy is relatively straightforward.

The Fed held interest rates steady in October after raising interest rates by a quarter point in September. Market participants expect the central bank to raise rates again before the end of this year to combat elevated inflation.

However, risks to the demand outlook remain easy to envision, Barkin said.

"Because of that, it is wise to move policy with care," according to published remarks Barkin delivered in Greer, S.C., on Monday.

Resilient demand paired with broad-based cost increases have put upward pressure on prices, he said. "Firms tell us this pressure continues and is leading them to also try to pass on increases that they've absorbed to date."

While Barkin said the risk lies on the inflation side of the Fed's dual mandate should the economy remain on its current path, he also laid out risk scenarios to the maximum employment side. If AI underdelivers, business investment could pull back, stock prices could follow, and so too could asset-fueled consumer spending, he said.

In addition, risks run the other way.

"AI could overdeliver and displace more workers than expected, resulting in a pullback in spending. Either scenario would move attention to the maximum employment part of our mandate," Barkin said.

Write to Jessica Coacci at jessica.coacci@wsj.com

(END) Dow Jones Newswires

November 09, 2026 12:38 ET (17:38 GMT)