Cautious statements from the Fed regarding interest rate cuts.

Important Statements on Interest Rate Cuts from Fed Governor Barr

Federal Reserve (Fed) Governor Christopher Barr emphasized that the U.S. Central Bank should adopt a more cautious approach regarding interest rate cuts while drawing attention to inflation risks. Barr also highlighted the importance of potential vulnerabilities in an roughly balanced labor market.

Careful Attention to Necessary Data

Speaking at the Minnesota Economics Club event in Bellville, Barr stated to the members of the Federal Open Market Committee (FOMC), "We must be cautious to gather more data and update our forecasts." He noted that this approach would assist in better assessing potential risks.

Supports the September Rate Cut

Barr supported the quarter-point interest rate cut implemented in September, expressing concerns not only about inflation but also about new tariffs. He stressed that the current policy interest rate is "reasonably restrictive," evaluating the strong trend of consumer spending and its effects on PCE inflation.

Inflation Expectations Lasting Until 2027

Barr projected that the Personal Consumption Expenditures Price Index (PCE) core inflation would exceed 3% by the end of this year. This would mark the longest period since 1993 that inflation remains above 2%. Central bank officials emphasized that they do not expect headline inflation to drop to around 2% until the end of 2027.