More from Fed’s Barkin: Still perceive core inflation is coming down nicely

January 03, 2025 at 05:12PM
More from Fed’s Barkin:

Still perceive core underlying inflation is coming down nicely

Message from businesses is loud and clear that consumers are becoming more price sensitive

Expect 12-month inflation to decline in coming months, particularly given base effects over prior year

Pass through from tariffs to prices is not straightforward, depends on multiple factors including business supply chains and price elasticity of consumers

Says he is in the camp of staying restrictive for longer given possible upside inflation risks

Conditions for cutting rates again include confidence in inflation’s return to 2% or weakening of demand

Companies feel more optimistic about the economy but are concerned about how coming changes will impact their businesses.

Barkin’s comment that underlying inflation is still coming down is encouraging.

S&P index is up 1.03%. While the NASDAQ index is up 1.36% after testing its 200 hour moving average at 19571 (high price reached 19567.12).

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