However, he cautioned that some inflation components remain difficult to assess in real time. In particular, Barkin said shelter inflation continues to be biased by incomplete data, citing the absence of October inputs as a distortion that complicates interpretation of underlying trends.
Barkin also offered updated colour on how businesses are responding to trade policy uncertainty. He said firms now appear to have greater confidence in understanding the likely outcomes of tariff policy compared with last April, suggesting that uncertainty around trade measures has eased somewhat even if costs have not disappeared.
That said, Barkin warned tariffs remain a source of inflationary pressure over time. While the timing and magnitude of those effects remain unclear, he said there is still some residual cost pressure working its way through supply chains, reinforcing the need for caution when assessing the medium-term inflation outlook.
Taken together, Barkin’s comments reinforce the Fed’s broader message of flexibility and patience: inflation appears to be cooling, businesses are adapting to policy uncertainty, and policymakers see room to adjust without overreacting to any single data point or meeting
