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No view yet on May interest rate hike – Fed’s Barkin
Richmond Federal Reserve bank president Thomas Barkin said Thursday that he had not come to a view yet on what rate increase might be appropriate at the Fed’s May 1-2 session, and is “comfortable” with meeting-by-meeting decisions on whether or not to move by a quarter of a basis point.
So far, he said, it did not seem as if the failures of Silicon Valley Bank and Signature Bank would lead to a broader financial crisis, with deposit flows now “relatively stable.”
Inflation, meanwhile, “is still very high. The job market is still really tight,” he said in comments to the Virginia Council of CEOs.
“There is a lot of uncertainty about what if anything this bank situation does to consumer confidence, business confidence, business investment, consumer spending, availability of credit….There are a lot of questions about what is going to happen to demand and inflation,” Barkin said. “It is pretty hard to know here on March 30.”
“I’m comfortable with the trajectory we’re on now – meeting by meeting, whether you need a 25 basis point hike or not,” Barkin said. “You’ll never get it perfect but if you are not quite right you’re not going to get it that far wrong.”
The Fed raised interest rates at its last meeting by a quarter of a percentage point, to a range between 4.75% to 5%, and indicated further increases would hinge on whether credit tightened appreciably in the wake of recent bank failures.
(Reuters)
