Fed’s Barkin says more data needed before rate hikes are appropriate

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October 14 (Businesshala) – Richmond Federal Reserve Chairman Tom Barkin said on Thursday that the US central bank has cleared the way for what it expects to have a “seamless” start to its lack of support for the economy, but there is more to it. It will take time to determine when a hike in interest rates is appropriate.

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In remarks prepared for delivery to the Forecasters Club of New York, Barkin said, “We still have a lot to know if recent inflation levels will be sustained and how much room we will have to run into the labor market until That we don’t get maximum employment.” . “As COVID-19 gets easier than expected, I hope the answers to these questions become clearer.”

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Fed policymakers think labor markets have recovered enough to begin reducing their crisis-era support for the US economy “soon”, and possibly by the middle of next month, 21-22. The September policy meeting was shown on Wednesday.

That language provided the “advance” warning the central bank had promised before reducing $120 billion in monthly purchases of Treasury bonds and mortgage-backed securities, Barkin said in his remarks.

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Nearly half of Fed policymakers believe the central bank will have to start raising interest rates by the end of next year, with forecasts released on September 22 showing that everyone is confident it will happen by the end of 2023. will be required. The Fed does not disclose policymakers’ individual interest rate forecasts, nor the economic assumptions on which they are based.

Barkin said on Thursday that he would like to provide that information.

“Doing so will provide a clearer picture of each FOMC (Federal Open Market Committee) member’s individual response function, and may help shed more light on the Fed’s overall response function, if taken as a whole,” They said.

Reporting by Ann Safir Editing by Paul Simao

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