In a recent interview, Richmond Federal Reserve President Tom Barkin shared his thoughts on the current state of the economy, and while he acknowledged the resilience of the labor market, he expressed more concern about inflation. According to Barkin, recent rate cuts have helped the labor market, but the focus now is on bringing down inflation, which he believes is a more pressing issue.

Barkin’s comments come as a surprise, given that some members of the Federal Open Market Committee (FOMC) have expressed concerns about weakness in labor markets. However, Barkin’s conversations with companies suggest that layoffs at scale are not planned, which suggests that demand remains strong. This differs from the views of some other FOMC members, who have expressed worries about the impact of the pandemic on the labor market.

Barkin’s hawkish stance is notable, as it indicates that he is less inclined to cut rates further in light of inflation concerns. While the economy has shown remarkable resilience, Barkin believes that addressing inflation is a more pressing issue at this time. This could signal a shift in the Fed’s monetary policy stance, as it weighs the potential risks and benefits of continued rate cuts.

It’s worth noting that Barkin’s views are not necessarily representative of the entire Fed, and other members may have different perspectives on the economy. However, his comments do provide insight into the Fed’s current thinking and could influence its future policy decisions. As the economy continues to evolve, it will be important to monitor Barkin’s views and those of other Fed officials to gain a better understanding of their approach to monetary policy.