Latest news with #TomBarkin
Bloomberg
4 days ago
- Business
- Bloomberg
Fed's Barkin Says Data May Show US Consumer Improved in July
Federal Reserve Bank of Richmond President Tom Barkin said he sees signs that the environment for US consumers improved in July after weakness earlier in the year. 'I am getting a smell of a stronger July on the consumer side,' Barkin said Thursday during a webinar hosted by the National Association for Business Economics. 'If you look at weekly credit-card data, for example, it looks a lot healthier.'
Wall Street Journal
6 days ago
- Business
- Wall Street Journal
Choosy Consumers Could Blunt Inflationary Effect of Tariffs, Barkin Says
Tom Barkin, president of the Federal Reserve Bank of Richmond, at an event in Durham, N.C., in May. (Cornell Watson for WSJ)
Economic Times
6 days ago
- Business
- Economic Times
Asian stocks gain after US CPI fuels Fed rate cut bets
Elsewhere, Japan's 10-year government bond traded on Wednesday morning after it wasn't traded at all on Tuesday, the first such instance in over two years. Global stocks reached record highs following a US inflation report that fueled speculation of a potential Federal Reserve rate cut in September. The data suggested the Fed could ease policy without triggering significant price increases, despite underlying inflation showing a slight acceleration. Market focus now shifts to upcoming US retail sales figures to gauge consumer sentiment amid labor market concerns. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Stocks climbed to a record after an in-line US inflation reading bolstered speculation the Federal Reserve will have room to cut rates in MSCI All Country World Index rose 0.1% to an all-time high, tracking Wall Street's surge to fresh peaks. A gauge of Asian shares rose 0.4% at open, helped by a new record for the Nikkei-225 index in Japan. Treasuries dipped with the yield on the 10-year inching up to 4.30%. The dollar was steady after falling in the prior inflation data bolstered expectations that the Fed can move toward rate cuts without reigniting price pressures. While underlying inflation accelerated to the strongest since the start of the year, the modest gain in goods prices eased fears that trade-related costs may feed into broader price pressures.'Inflation is on the rise, but it didn't increase as much as some people feared,' said Ellen Zentner at Morgan Stanley Wealth Management. 'In the short term, markets will likely embrace these numbers because they should allow the Fed to focus on labor-market weakness and keep a September rate cut on the table.'Fed Bank of Richmond President Tom Barkin said uncertainty over the direction of the economy is decreasing, but it's unclear whether the central bank should concentrate more on controlling inflation or bolstering the job a social media post, President Donald Trump resumed his criticism of Jerome Powell over the central bank's decision to hold rates steady. Trump also said he is weighing a lawsuit against the Fed chief over the renovation of the central bank's headquarters - a project whose cost overruns have drawn scrutiny.'The Fed's policy stance is highly data-dependent, and with inflation contained and labor market softness increasingly evident in revised payroll data, the emphasis will now be skewed toward employment,' said Alexandra Wilson-Elizondo at Goldman Sachs Asset Management. 'This inflation print supports the narrative of an insurance rate cut in September, which will be a key driving force for the markets.'The Fed has kept rates unchanged this year in hopes of gaining clarity on whether tariffs will lead to sustained inflation. At the same time, the labor market — the other half of their dual policy mandate — is showing signs of losing risks to the labor market rising, the Fed would likely tolerate temporarily higher-than-expected inflation prints — provided that the risk of second-round effects remains contained and price expectations stay well-anchored, according to Marco Casiraghi at Evercore.'I think the real thing now to think about is should we get a 50 basis-point rate cut in September,' Treasury Secretary Scott Bessent told Fox Business. He said the Fed could have cut rates in June or July if they'd had the 'original' jobs reports CPI out of the way, the focus will shift to Friday's US retail sales figure, where investors will see if consumers appear as upbeat as corporate earnings commentary has made them seem and amid worries about the labor market, according to Bret Kenwell at Asia, China will implement more levies on Canadian rapeseed after an anti-dumping probe, escalating a trade spat that's disrupted crop Japan's 10-year government bond traded on Wednesday morning after it wasn't traded at all on Tuesday, the first such instance in over two years.
Economic Times
6 days ago
- Business
- Economic Times
July 2025 CPI report: headline inflation cools but core prices surge — what it means for your wallet, mortgage, and everyday costs — what may rise and fall
Synopsis July 2025 CPI report reveals a mixed inflation picture, with headline inflation steady at 2.7% year-over-year and core inflation rising to 3.1%. Energy prices fell, easing costs, but tariffs pushed up core goods prices like clothing and furniture. This report impacts mortgage rates and everyday budgets, leaving Federal Reserve decisions uncertain. Homeowners and buyers should watch inflation trends closely as borrowing costs and prices continue to fluctuate. July 2025 CPI report delivers a clear yet complex snapshot of inflation's current state. While overall prices stayed steady with a 2.7% yearly rise, core inflation—excluding food and energy—jumped to its highest level in six months at 3.1%. Falling energy costs offer some relief, but rising tariffs are pushing prices up for everyday items like clothing and furniture. The July 2025 Consumer Price Index (CPI) report was released today, presenting a complex view of inflation that's capturing the attention of investors, policymakers, and millions of Americans managing their monthly expenses. While overall inflation appears to be cooling, a rise in core prices—excluding food and energy—raises fresh concerns about the real cost of living and the future direction of mortgage rates. The latest figures from the Bureau of Labor Statistics show headline inflation increased 2.7% year-over-year, matching June's rate and slightly below economists' expectations. On a monthly basis, prices edged up by a modest 0.2%, signaling that broad inflation pressures remain relatively subdued. However, stripping out the more volatile food and energy sectors, core inflation climbed to 3.1% year-over-year—its fastest pace in six months. This increase highlights underlying price pressures, mainly fueled by tariffs that have pushed costs higher for consumer goods like clothing, furniture, and household essentials. Energy prices eased in July, declining by 1.1% overall, with gasoline down 2.2%—offering some relief to drivers and households at the pump. Grocery prices held steady, though eating out became a bit more expensive. The complication? Tariffs on imported goods are quietly driving up costs in key categories. Retailers facing higher expenses for apparel and furniture have passed these increases onto consumers, sustaining inflation in areas that directly impact daily spending. Richmond Fed President Tom Barkin commented on this trend, noting that while consumer expectations of tariff hikes may temporarily obscure inflation trends, a sharp drop in spending could threaten economic growth and job stability. Markets responded positively after the report. The Dow Jones Industrial Average surged nearly 1%, reaching 44,429 points, while the S&P 500 and Nasdaq gained 0.5% and 0.45%, respectively. Investors viewed the steady headline inflation as a sign the Federal Reserve might pause aggressive interest rate increases—and possibly even consider cuts—to support economic growth. Yet, the persistent core inflation leaves the Fed's future moves uncertain, fueling cautious optimism among traders. Mortgage borrowers and potential buyers are watching these developments closely. Lower or stable interest rates could make monthly payments more affordable, easing financial pressure on many families. On the other hand, if core inflation stays high, the Federal Reserve may maintain elevated rates for longer to contain price pressures—potentially keeping mortgage costs high or pushing them even higher. In this delicate balance, both homeowners and buyers should stay attentive to Fed announcements, as their decisions will impact loan rates, refinancing opportunities, and overall housing affordability. Core goods and services — Prices for clothing, furniture, and household essentials are rising, largely due to tariffs and supply chain disruptions. This means your monthly budget for these items could stretch tighter in the coming months. — Prices for clothing, furniture, and household essentials are rising, largely due to tariffs and supply chain disruptions. This means your monthly budget for these items could stretch tighter in the coming months. Dining out and some services — As food prices at grocery stores stabilize, the cost of eating out and other service-related expenses may see modest increases. — As food prices at grocery stores stabilize, the cost of eating out and other service-related expenses may see modest increases. Mortgage payments (potentially) — If core inflation remains high, the Federal Reserve may keep interest rates elevated longer, which could translate to higher or stable mortgage EMIs, especially for new borrowers or those refinancing. Energy costs — Gasoline prices dropped 2.2% in July, and overall energy costs fell by 1.1%, offering some immediate relief for drivers and households on utility bills. — Gasoline prices dropped 2.2% in July, and overall energy costs fell by 1.1%, offering some immediate relief for drivers and households on utility bills. Grocery bills — Food prices were largely stable or slightly down, which could ease pressure on families' grocery budgets. — Food prices were largely stable or slightly down, which could ease pressure on families' grocery budgets. Interest rates (potentially) — Market optimism and steady headline inflation have raised hopes that the Federal Reserve may pause rate hikes or even cut rates, which would lower borrowing costs and reduce mortgage payments for many. Navigating this landscape means staying informed and flexible: Budget wisely — Expect some everyday costs to rise, so prioritize spending and look for savings where possible. — Expect some everyday costs to rise, so prioritize spending and look for savings where possible. Watch mortgage rates — Keep an eye on Federal Reserve signals. If rates fall, refinancing could be a smart move to reduce EMIs. — Keep an eye on Federal Reserve signals. If rates fall, refinancing could be a smart move to reduce EMIs. Plan for volatility — Inflation's mixed signals mean prices won't move uniformly. Some costs may ease while others climb. For consumers, the mixed inflation signals offer both some relief and ongoing challenges. Falling energy prices help reduce daily expenses, but rising costs for clothing, furniture, and household goods will tighten budgets. The ongoing tariff-driven price increases mean shoppers might need to rethink spending priorities, deciding what to buy now and what to postpone. With inflation's 'hidden' pressures at play, keeping a close watch on household budgets and borrowing costs is more important than ever. Federal Reserve officials now face a challenging task—balancing efforts to control inflation without hindering economic growth or job creation. For the time being, Americans should prepare for a scenario where some prices continue to rise even as others ease, and where borrowing costs remain a key factor shaping personal finances. What caused core inflation rise July 2025 CPI? Tariffs increased prices on imported goods like clothing and furniture. How will July CPI affect mortgage rates? Core inflation rise may keep mortgage rates higher longer.
Reuters
7 days ago
- Business
- Reuters
Richmond Fed's Barkin: Consumers will be key to coming inflation, jobs results
WASHINGTON, Aug 12 (Reuters) - Aggressive shopping by consumers may mute the impact of tariffs on inflation but could also lead to a cycle of falling demand and rising unemployment, Richmond Fed president Tom Barkin said on Tuesday, while adding he is hopeful a sharp rise in the jobless rate will be avoided because household spending has held up well so far. Barkin, in prepared remarks to a health group in Chicago, said he felt some of the earlier "fog" that clouded the economic outlook is lifting with the passage of a major tax bill, more visibility on changes in immigration, and the finalization of tariff and trade deals by the Trump administration. The net outcome, he said, will now hinge on how consumers respond to any emerging price pressures. He suggested that so far their shift to bargain hunting, an earlier wave of spending to front-run anticipated tariffs, and other actions may actually be helping to mute price pressures. "Amid all the talk of tariffs and higher goods prices to come, we've seen people stock up on iPhones and cut back on services, such as air travel and lodging. If we see this kind of demand destruction more broadly, the inflationary impact of tariffs would be less than many anticipate," Barkin said. New data showed July consumer price inflation largely in line with expectations, with a measure of "core" or underlying inflation rising to 3.1%. The risk, Barkin said, is that consumers pull back so sharply that "businesses will see volumes drop and margins squeezed. They will look for costs to cut. Employment could take a hit as a result," However, he feels that outcome can be avoided given that businesses have been reluctant to shed staff, and given the likely slower growth in labor supply from tightened immigration policy and ongoing retirements among older workers. "Job gains have slowed recently, which is certainly worth watching. But I'm hopeful that even as businesses face cost and price pressure, they'll largely avoid the type of large layoffs that would spike unemployment," he said. Barkin is not a voter this year on interest rate policy, but said he felt the current benchmark rate of 4.25% to 4.5% is "well positioned" to respond to either rising inflation or rising unemployment, both of which remain possible. "We may well see pressure on inflation, and we may also see pressure on unemployment, but the balance between the two is still unclear," he said. "As the visibility continues to improve, we are well positioned to adjust our policy stance as needed."
