Fed’s Barkin: 50 bps cut warranted as rates were out of sync with decline in inflation

Richmond Fed Pres. Barton is a speaking

• The Fed’s 50 basis point cut was warranted as rates were at of St. with declines inflation and unemployment rate near its sustainable level
• Fed cannot declare inflation battle is over
• Expect little further drop in core PCE until next year
• Watching closely how lower interest rates influence home and auto sales to see if the man risks out running supply
• 50 basis points to cut shown as the median Fed policy projection for the rest of 2024 would also take a little bit of the edge off rates
• While a low hiring, low firing labor market could persist, demand for workers could also move higher if demand grows
• Recent labor action and geopolitical conflict are also among inflation risks
• The pace and extent of rate reduction cycle requires Fed to be attentive to how economy and inflation evolve

This article was written by Greg Michalowski at www.forexlive.com.