💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueLearn More

Fed has 'some time' to assess slowdown in economy, Fed's Barkin says

Published 2024-08-08, 04:08 p/m
© Reuters

Investing.com -- Richmond Fed president Thomas Barkin on Thursday downplayed calls for urgent rate-cutting action, and said the Fed has time to wait to assess the pace of slowing in the economy. 

The Fed has "some time" to assess whether this is an economy that's "gently moving into a normalizing state ... or one where you really do have to lean into it," Barkin said Thursday at a virtual event put on by the National Association for Business Economics.

The Richmond fed president also poured cold water on recent fears the labor market is signalling economic doom ahead, noting that the slowing wage growth points to normalizing in the labor market. 

The Fed, however, would be worried if job growth started to disappear, but that doesn't appear to be an immediate concern. 

"What I hear from folks on the ground in the labor market is that people are cutting back on hiring, but not firing," Barkin added. 

On the inflation front, Barkin said he was "pretty optimistic" that incoming data over the next few months would show good readings. 

In a sign that the market concerns about an impending recession is cooling, Barkin flagged the recent dip in bets on a 50 basis points cut in September suggests that the market is returning to the Fed's view that the economic growth is slowing rather than at risk of falling off a cliff.  

Bets on a 50bps cut in September fell to 56% from 72% a day earlier, according to Investing.com's Fed Rate Monitor Tool.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.