Federal Reserve officials, Thomas Barkin and Raphael Bostic, have expressed concerns over the potential for an economic slowdown in the United States, despite recent robust growth data. Their comments were made at a fireside chat in New Orleans on Thursday, signaling that the economy may not have fully absorbed the impact of past rate hikes.
Bostic, who is known for his dovish policy stance and serves as the Atlanta Fed President, stated that he believes the current Federal Reserve policy is restrictive enough to curb inflation. He warned of imminent economic instability but committed to maintaining this stance until inflation reaches a target of 2%.
On the other hand, Richmond Fed President Thomas Barkin, known for his hawkish views, predicted an economic downturn. Barkin's forecast contradicts recent strong Q3 growth data. He argued that a slowdown is necessary to demonstrate to price-setters their diminishing influence on prices.
These remarks come as the Federal Reserve contemplates further increases in interest rates, despite them being at a 22-year high of between 5.25% and 5.5%. This contemplation goes against market investors' expectations, who predict no further increases.
Later today, the financial sector is keenly awaiting a speech by Fed Chair Jerome Powell at an International Monetary Fund (IMF) conference in Washington. The speech could provide further insights into the Federal Reserve's future monetary policy direction amidst these diverging viewpoints from its officials.
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