#Balkin: Rate cut expectations weaken#

Federal Reserve Governor Barkin recently gave a speech in which he adjusted expectations for interest rate declines. He said that he is increasingly recognizing that long-term interest rates may not fall as sharply as previously hoped. While he is optimistic about the economic outlook for 2025 and expects more upside than downside to growth, he believes that inflation has not yet returned to the Fed's 2% target and therefore further action is needed to control inflation, but not as restrictive as before. Barkin's comments suggest that the Fed's expectations for interest rate declines have weakened and that future rate cuts may not be as rapid as the market expects. This is likely due to recent economic data showing that inflation remains stubborn and the labor market remains strong, which has heightened the Fed's concerns about inflation. Barkin's speech also reflects the cautious attitude within the Fed about the direction of future monetary policy, as they will decide on their next steps based on economic data and inflation trends.