Barkin highlights 3.7% core PCE and persistent inflation risks, leaving September or October rate hike options open.
Federal Reserve official Thomas Barkin declined to rule out a rate hike in September or October, citing sticky inflation and resilient economic data. His remarks, delivered before Chicago Fed President Austan Goolsbee’s more dovish comments, underscore a divided Fed stance on policy direction.
Barkin emphasized 3.7% core PCE inflation and the risk of entrenched expectations, contrasting with Goolsbee’s cautious optimism and Esther Hammack’s call for immediate action. Markets have since trimmed September hike odds to around 50% after recent CPI and PPI data.
Upcoming retail sales figures and July FOMC minutes on August 19 will test which narrative—urgency, agnosticism, or optimism—prevails among policymakers. Futures pricing reflects heightened uncertainty as regional Fed presidents’ views gain outsized market influence.