The Inflation Story

Tom Barkin

Speech from Federal Reserve Bank of Richmond

Abstract: Inflation has proven stubbornly persistent. There is a plausible story for how inflation comes down. That story relies on weakening demand to control inflation. I am still looking to be convinced, both that demand is settling and that any weakness is feeding through to inflation. We will learn a lot more over the next few months. The Fed has moved aggressively against inflation. But we have been moderating the pace of those increases. Think of it as slowing your boat as you approach the dock. If coming data doesn’t support the plausible story, I’m comfortable doing more. The experience of the ‘70s provides a clear lesson: If you back off inflation too soon, inflation comes back stronger, requiring the Fed to do even more, with even more damage.

Keywords: inflation; monetary policy (search for similar items in EconPapers)
Date: 2023-06-16
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