Thomas Barkin who is the chairman of the Richmond Fed gave an insight on the rarity of the Fed’s further action on the policies applied. He is of the view that it is likely that the United States (U.S.) employment sector will take a few more months to recover. If this happens, the Fed is likely to reduce their economic stimulus.
Several Fed officials including Barkin argued that bond buying should be stopped as soon as possible to put monetary policy at a more normal level, raise interest rates and raise asset prices.
In a policy meeting, the Fed was of the view that the U.S. economy was making progress and was on track to reach the full workforce as desired before reducing bond purchases.
Thus, Barkin is more likely for the Fed to commit to what it has promised, which is to reduce bond purchases until the labor market fully recovers.
On the inflation rate, Barkin personally is of the view that inflation has reached its peak but it is expected to start to stabilize in the next few months. At the same time there is still no certainty as it depends on a solution to the supply chain disruption with the increasingly tense US-China relations.
For example, he is comfortable with the Fed's current approach, which is to lower the forecast and review further data to get a true picture of the impact of the pandemic.
