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Feds Barkin on Bloomberg says:
- Data shows economy on same trajectory as last year or two
- Low unemployment and inflation moving towards target.
- Will have to see how consumers react to price changes.
- Seeing lots of hiring freezes.
- Businesses are still largely pulling to the sidelines.
- People are patient on investment, does not see a case for businesses to cancel investment plans.
- Thinks business sentiment is a very good indicator
- Government spending cuts are having an impact on employment, job positions particular in the DC area
- Consumer spending has historically correlated with consumer sentiment, but it has been questioned over the last couple years.
- Does not see in real-time data that spending is dropping.
- Consumers are anticipating inflation and that has hit sentiment, no evidence yet that has translated into less spending.
- Sees impact on inflation and employment from Trump policies is balance
- There is two types of reaction to Trump tariffs. One, is front loading inventory build up. The other is to pull back on imports
- Waiting to see what happens
SUMMARY
Barkin’s comments reflect a cautious neutrality—the economy appears stable, with low unemployment and inflation gradually moving toward target, but signs of business hesitation (e.g., hiring freezes and delayed investments) and consumer wariness are emerging. While he doesn’t see immediate drops in spending or business cancellations, he acknowledges uncertainty around consumer reactions, tariff impacts, and government spending cuts, particularly in sensitive regions like D.C.
He remains in wait-and-see mode, watching how businesses and consumers respond to pricing and policy changes. The lack of urgency to adjust policy suggests the Fed is leaning toward patience rather than action, but downside risks are clearly on the radar.
Bias: Neutral to slightly cautious, with more focus on risks than the upside potential. This is congruent with most commentary from Fed officials.
Meanwhile fiscal policy is switching from tightening to easing. Today is a day to focus on stimulus as the market reacts to the reprieve from the 50% tariffs “recommended” by Trump on Friday.
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