Fed’s Barkin Says Repeated Supply Shocks Test Inflation Anchor

Federal Reserve Bank of Richmond President Tom Barkin said the ability of businesses and consumers to tolerate the latest in a series of supply shocks will determine whether the US central bank can continue to “look through” higher inflation without raising interest rates.

“With inflation above our 2% target for over five years now, it’s worth asking whether the cumulative impact of so many waves risks loosening the anchor,” Barkin said Thursday in remarks prepared for a speech in Raleigh, North Carolina. “For me, it comes down to how much businesses, consumers, and inflation expectations can take.”

Barkin’s comments come ...