#Balkin: Rate cut expectations weaken#

Federal Reserve Governor Barkin recently gave a speech in which he expressed caution about expectations of interest rate declines. He said that there is a growing recognition that long-term interest rates may not fall as sharply as previously hoped. While he is optimistic about the economic outlook for 2025, expecting growth to be higher than anticipated, he also noted that inflation has not yet returned to the Fed's 2% target, and therefore the Fed still needs to take steps to control inflation. Barkin believes that while recent business optimism has rebounded, slower growth in labor supply may lead businesses to limit price increases, thus continuing to put downward pressure on inflation. He emphasized that while the Fed may not need to take as restrictive measures as before, it still needs to continue its efforts to control inflation. Barkin's remarks suggest that the Fed's expectations for interest rate declines have weakened, and that it may need to take further steps to control inflation in the future, which will have an impact on the market.