#Balkin: Rate cut expectations weaken#

Federal Reserve Governor Barkin recently gave a speech in which he expressed optimism about the U.S. economic outlook, expecting that the upside potential for growth outweighs the downside risks. He also suggested that further restrictive measures to control inflation are not needed. However, he also acknowledged that he is increasingly recognizing that long-term interest rates may not decline as much as previously hoped. Barkin believes that strong consumer spending growth, high business optimism, and a labor market balance that is more likely to shift towards hiring rather than layoffs will all contribute to economic growth. Additionally, consumer focus on costs will put pressure on businesses to limit price increases, which will continue to dampen inflation. Despite this, Barkin also noted that inflation has not yet returned to the Fed's 2% target and that continued efforts are needed.