(Bloomberg) -- Federal Reserve Bank of Richmond President Thomas Barkin said he was still looking to be convinced that inflation has been defeated and that he’d support raising interest rates further if needed.
“I do want to learn more about what’s happening with all these lagged effects. But I also want to reduce inflation,” he said in an interview Tuesday on Bloomberg Television with Michael McKee. “And if more increases are what’s necessary to do that I’m comfortable doing that.”
Barkin, who isn’t a voter this year on the policy-setting Federal Open Market Committee, was speaking on the sidelines of the Atlanta Fed’s annual financial markets conference on Amelia Island, Florida.
Policymakers raised rates by a quarter percentage point at a meeting earlier this month, bringing their benchmark to a target range of 5% to 5.25%, and signaled they may be ready to pause their tightening cycle.
Barkin, though, said officials haven’t decided what they will do at next month’s FOMC meeting.
“The message sent in the last statement was one of optionality,” he said, noting that uncertainty is high and there was a lot of data due before the June 13-14 meeting, in addition to other potential headwinds for the economy.
“You’ve got questions about the debt ceiling and what impact that might have. You’ve got questions about credit tightening and how significant that might be,” the Richmond Fed chief said. “So I think it gives you time and optionality to say either there’s still more we need to do so let’s do more, or it’s still OK to wait and we’ll wait a bit.”
Consumer prices climbed 4.9% from a year earlier in April, the first sub-5% reading in two years. Excluding food and energy, the so-called core inflation rate also moderated. While the Fed targets a different yardstick of annual price movements — the personal consumption expenditures gauge — all measures are running at more than double the central bank’s 2% target pace.
“There’s a plausible story that we get inflation down, due to a lot of the actions that have been taken in the past – both ours and by others,” Barkin said. “But I’m still looking to be convinced on that story and it may take more.”
(Updates with additional comments starting in sixth paragraph.)
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