Broadening Inflation Pressure: Fed’s Barkin Favours a Gradual Approach

The pace of policy moves remains the question for the Fed. Speaking on SiriusXM Business Briefing on Friday, Richmond Federal Reserve President Thomas Barkin described the direction of travel as “straightforward”.

On interest rates, Barkin said in his remarks that taking a gradual approach was “a good way to go.” Businesses reported broader cost pressures, he added, and argued that they needed to increase prices following years of high inflation.

Barkin’s Main Points:

For the Fed, the issue is pace; its direction of travel is "straightforward"

Moving gradually is a suitable approach at present

American businesses face substantial cost pressures

After years of elevated inflation, businesses can more readily make the case for price increases

Despite relatively flat incomes, consumer spending has proved surprisingly resilient

Supply chains have come under pressure from surging AI investment, adding to inflation

The Fed can counter the demand-side inflation being generated by AI investment

Demand is still solid, business owners report, with weakness confined to non-profits and housing

Cost pressures extend across a broad range of areas, according to businesses

Plans are being drawn up by businesses to pass these costs on to customers

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

0.16% Gain Against Euro: US Dollar Today

Against the Euro, the US Dollar (USD) recorded its strongest performance today. The table below sets out its percentage moves against the listed major currencies.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.16%	-0.15%	-0.13%	-0.22%	-0.09%	-0.01%	-0.16%
EUR	-0.16%		-0.31%	-0.30%	-0.38%	-0.25%	-0.17%	-0.32%
GBP	0.15%	0.31%		0.02%	-0.06%	0.04%	0.13%	-0.01%
JPY	0.13%	0.30%	-0.02%		-0.07%	0.05%	0.12%	-0.01%
CAD	0.22%	0.38%	0.06%	0.07%		0.12%	0.20%	0.06%
AUD	0.09%	0.25%	-0.04%	-0.05%	-0.12%		0.08%	-0.06%
NZD	0.00%	0.17%	-0.13%	-0.12%	-0.20%	-0.08%		-0.14%
CHF	0.16%	0.32%	0.00%	0.01%	-0.06%	0.06%	0.14%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read USD (base)/JPY (quote), for example, start with the US Dollar on the left and follow its row horizontally to the Japanese Yen column. The intersecting cell gives the percentage change for that pair.