A Hawkish Turn

Richmond Fed Pres Tom Barkin, who does vote on monetary policy this year and did vote for that 50-basis point rate cut in September, spoke on Wednesday. He has appeared, at least to me in the past, to be quite pragmatic when looking forward. Barkin sounded as if he does actually see the worm starting to turn as do we. Remember, I have been telling you that consumer level inflation on a year over year basis, had very likely bottomed in the US in September for 2024. Inflation will start to rise; I believe possibly as soon as October and then into the first half of 2025.

From Wilmington, North Carolina, Barkin said, "It remains difficult to say that the inflation battle has yet been won." Barkin added, "Victory means different things to different people, and - while we have made real progress - there remains significant uncertainty on both inflation and employment." Barkin cited certain concerns... "Recent union actions or a pullback in labor supply" and of course... "Deglobalization could increase import Prices" and "The conflict in the Middle East could worsen."