FED: Richmond's Barkin Sounds Ambiguous On Further Cuts Amid Inflation Risks

In his 2025 economic outlook (link), Richmond Fed Pres Barkin is slightly ambiguous to what degree he sees further dialing back of policy restriction following on from 100bp of Fed funds cuts in 2024.

• His commentary ("Inflation is not yet back to target, so we still have more work to do, but we don’t think we need to be nearly as restrictive as we once were to finish that job... the Fed remains well positioned regardless of how the economy develops. Were employment to falter or inflation to reemerge, we have the tools to respond") sounds very closely aligned to that of Fed Chair Powell at the post-meeting press conference in December.
• But his definition of not being "nearly as restrictive as we once were" is ambigous (how much further than the 100bp of cuts already?), and much of the rest of his commentary sounds like he remains on the more cautious side of the FOMC spectrum: "I expect more upside than downside in terms of growth. I see more risk on the inflation side." And "none of us know how all of this will play out. So, it’s best to give it some time, and learn more about the path forward."
• He noted strength in the economy with consumer spending that "shows no signs of slowing" and says that “a low hiring, low firing labor market is still a healthy one".
• Re uncertainty over government policy: "Uncertainty should come down as policies are finalized, although it’s easy to imagine an extended period of back and forth."
• On upside inflation risks: "I see more risk on the inflation side. Wage and product costs could see pressure. If they do, given recent experience with inflation, price-setters might have more courage to pass costs along."
• "At the long end of the curve, there seems to be increased understanding that rates are unlikely to come down as much as some might have hoped."