Richmond Fed President Barkin: Recession predictions are not supported by current data
Data does not support predictions that US economy is headed toward a recession, Richmond Fed president says
Richmond Fed president addresses recession concerns
President of the Federal Reserve Bank of Richmond Thomas Barkin analyzes the latest economic data and consumer spending levels on 'The Claman Countdown.'
Despite mounting inflation concerns, Richmond Fed President Tom Barkin said that there are no signs of an imminent recession in the economic data or in the behavior of company executives.
Speaking on "The Claman Countdown" on Wednesday, Barkin said that he has yet to find concrete evidence that would support predictions of a devastating economic downturn in the U.S. over the course of next year.
"As I talk to businesses, they are talking about the risk of recession, but then I always ask the follow-up question, which is are you changing what you do? And right now, what I’m still hearing is people investing, consumer spending, you can’t find a recession in the data, and you can’t find it in the actions of executives," he said.
A man shops at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022, as Americans brace for summer sticker shock as inflation continues to grow. (Photo by Jim WATSON / AFP) (Photo by JIM WATSON/AFP via Getty Images) ((Photo by JIM WATSON/AFP via Getty Images) / Getty Images)
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Barkin added, "I grew up in Florida. I learned you always prepare for hurricanes, but a lot of them pass and don’t hit you."
Industry leaders have warned in recent weeks that the U.S. economy could be racing toward a recession in the next year, as persistently high inflation and an increasingly hawkish Federal Reserve weighs on growth.
Barkin didn't echo their concerns, telling host Liz Claman that he is closely monitoring the pace of inflation and the strength of the economy. For now, he said, the U.S. should normalize monetary policy, arguing that with "inflation this elevated and the economy still this strong, it just makes perfect sense to do that."
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" I do think it’s time both on rates and on the balance sheet to normalize where we are," he said.
If you think the price you’re paying for gas, groceries, or a candy bar has gone up, you are correct. Inflation is affecting the U.S. now more than ever, and some areas have it worse than others. (FNC / Fox News)
"When we get to the fall, I think we’re going to have a lot more information on the strength of the economy, we’ll have a lot more information on the pace of inflation. Those are the two things I’m paying the most attention to, and the stronger inflation and the stronger the economy, the more the case to do more, and to the extent that the two are weaker, the better the case is to do less."
While many worry that rising interest rates and soaring inflation could dampen consumer spending, Barkin said he is still seeing a strong consumer demand, which explains the soaring interest rates.
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"I’m still hearing very strong consumer demand at the high end," he said. "And at the lower end what I’m hearing is the start of the kind of trade down you normally see when things get a little tighter."
