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Fed’s Barkin Says Risks to Employment, Inflation Are Limited
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September 26, 2025
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10:06Now PlayingTom Barkin, president and CEO of the Federal Reserve Bank of Richmond, told Bloomberg's Mike McKee that the 'downside is relatively limited' on risk to inflation and employment, even as both metrics have moved away from the Fed's goals.
Federal Reserve Bank of Richmond President Tom Barkin said while unemployment and inflation have both moved away from the US central bank’s goals, he sees only limited risk of further deterioration on both fronts.
“We’re very much focused on trying to land the plane here and balancing inflation and unemployment,” Barkin said Friday in an interview on Bloomberg Television. “Both of them have ticked in the wrong direction — but on the other hand, the downside is limited, and we’re just going to have to adjust our stance as we learn more.”
Fed officials last week voted to reduce their benchmark interest rate by a quarter percentage point to address growing concerns about a slowdown in the labor market. They had previously held it steady in 2025 to assess the risk of inflation from President Donald Trump’s tariffs.
Projections published after the meeting and subsequent public commentary have indicated a split between those who would like to continue with rate cuts at upcoming gatherings to ward off risks to employment, and those who remain more concerned about the potential for inflation.
Barkin, who does not hold a vote this year on the rate-setting Federal Open Market Committee, said uncertainty that pervaded the economic outlook earlier in the year has started to lift for US companies.
“I do have the impression that for consumers and businesses, they’ve kind of put the news cycle behind them, and they’re just getting on with their business,” Barkin said in a separate discussion with Bloomberg reporters and editors.
Barkin also said he intends to study Dallas Fed President Lorie Logan’s proposal on Thursday that the central bank abandon the federal funds rate as its policy benchmark.
“I take whatever she has to say on this stuff very seriously, and I’m going to dig into it,” Barkin said. “But I thought it was a very interesting and thoughtful piece.”
The Richmond Fed chief spoke ahead of fresh data released Friday showing US personal spending rose in August by more than forecast and underlying inflation pressures held steady.
Barkin also delivered remarks Friday at the Peterson Institute for International Economics, where he said last week’s rate cut moves Fed policy closer to a level that neither stimulates nor restricts the US economy.
“This should help support the labor market while maintaining pressure on inflation, in the interest of keeping the economy on path to that more stable horizon,” he said, according to his prepared remarks.
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