Fed’s Barkin: Inflation is still too high

Thomas Barkin, President of the Federal Reserve Bank of Richmond, said on Wednesday, following the release of the US Consumer Price Index (CPI), that inflation remains too high. The data showed inflation continues to slow in the US with the annual rate falling to 3% in June, the lowest since March 2021.

Barkin stated that he is comfortable with doing more policy tightening if incoming data does not confirm that inflation will return to the 2% target. He pointed out that a relevant question is whether inflation can settle while the labor market remains as strong as it is. He also warned that demand remains elevated while supply is constrained.

Market reaction: 

The US Dollar is experiencing a sharp decline on Wednesday, as it was affected by the US Consumer Price Index report that came in below expectations. The DXY is currently trading at its lowest levels since early May, just slightly above 101.00 and down 0.50% for the day.