(Bloomberg) -- Federal Reserve Bank of Richmond President Thomas Barkin said there is a risk that US businesses, which boosted profit margins and sales by raising prices over the last couple of years, may be slow to give up their practice of significant hikes.
“If you were selling something, it was pretty good” with higher volumes and profits, Barkin said during a moderated discussion at the Atlanta Economics Club on Monday. “Is it conceivable that’s purely off the table? I don’t think so. I think it’s going to be on the table for a while now.”
“I think there’s a real risk that there will be continued inflationary pressure,” Barkin said.
Fed officials led by Chair Jerome Powell have indicated they’re in no rush to start lowering rates despite making significant progress in their inflation battle in the second half of 2023. Policymakers have left rates unchanged since July and have signaled that the next move is likely a cut.
Barkin, who is a voting member of the Fed’s policy-setting committee this year, said it’s premature to believe inflation pressures are over.
“Declaring victory at this point seems pretty bold,” he said, adding he will be reviewing fresh inflation data out Tuesday.
Read More: Barkin Says Fed Has Time to Be Patient on Cutting Interest Rates
The Fed will get an updated read then on the consumer price index, which economists expect probably rose less than 3% in January from a year earlier. The core CPI, a measure that excludes food and fuel for a better picture of underlying inflation, is seen increasing 3.7% in January from a year ago. That would mark the smallest year-over-year advance since April 2021.
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