WASHINGTON (dpa-AFX) - The U.S. economy is now more vulnerable to inflation shocks than it was in the past, Federal Reserve Bank of Richmond President Tom Barkin said in an interview to the Financial Times published on Wednesday, as businesses grow increasingly concerned about the impact of the Donald Trump administration's policies regarding tariffs and migrants.
'We're somewhat more vulnerable to cost shocks on the inflation side, whether they be wage-[related] or otherwise, than we might have been five years ago,' Barkin told FT.
The Fed policymaker expects inflation to ease but warned that businesses were passing on costs to consumers more readily than in the past thus having an impact on prices, FT reported.
U.S. inflation accelerated to 2.6 percent in October from 2.4 percent in September, while core price growth remained steady at 3.3 percent.
In an interview with Yahoo Finance earlier this week, Barkin stressed on the need for Fed to be careful with the pace of the rate-cutting campaign due to the uncertain economic outlook.
Last week, Fed Chair Jerome Powell said that the central bank does not 'need to be in a hurry to lower rates' due to the strength of the economy, thus damping hopes of a rate cut in December following a quarter-point reduction this month.
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