Fed's Barkin: There is a risk on the employment side

Federal Reserve (Fed) Bank of Richmond President Thomas Barkin hit the wires on Monday, cautioning that while US economic data remains overall firm, there are still risks present and cracks beginning to form in key data releases. Despite President Donald Trump's insistence that he "wants" the Fed to lower interest rates, the Trump administration is locking itself out of that opportunity as tariff policies make it impossible for the Fed to make accurate forecasts.

Key highlights

It's going to take a while before we get clarity on tariff impact.

My base case is that it takes a while for tariff clarity.

Suppliers are emboldened, say they will have to pass on higher prices.

Consumers say they are tired of paying higher prices.

I see some risk on the employment side from tariffs.

I am not convinced higher prices won't be passed on, or that there won't be inflation.

To cut rates, you need confidence on inflation.

1970s stagflation was characterized by out-of-whack inflation expectations; not seeing that now.

Data right now is okay, there is a risk on the employment side.

This is not a time for me to say how many rate cuts I have penciled in for this year.

Now is not a time for forward guidance on policy.

I'm nervous about inflation, and about employment.

I am in no hurry on rate cuts.

Balance sheet run off could be slower, for longer.