Richmond Fed President Barkin said inflation has run above the Fed's 2% target
for nearly six years and that risks to the central bank's dual mandate are
concentrated on the inflation side. He said firms face broad cost increases and
plan to pass some costs to consumers. With demand remaining strong and inflation
elevated, the direction toward tighter policy is clear but should be pursued
cautiously. Barkin warned that weaker-than-expected AI progress could damp
business investment, equity prices and consumption, while stronger-than-expected
AI could accelerate job displacement. He will be an FOMC voting member in 2027.
