Thomas Barkin, president of the Federal Reserve Bank of Richmond, stated on May 21, 2026, that inflation has exceeded the Fed's 2% target for over five years. He expressed concern that persistent price increases are negatively impacting economic expectations among businesses and consumers.
Data from March 2026 shows headline PCE at 3.5%. By mid-August 2026, core PCE, which excludes food and energy, reached 3.7%. Both indicators remain significantly higher than the official 2% target set by the Federal Reserve.
Barkin attributed the current inflationary environment to a series of supply shocks, including the COVID-19 pandemic, the conflict in Ukraine, and changes in tariff policies. He noted that these factors are difficult to address solely through interest rate adjustments.
The Federal Reserve is currently evaluating whether existing interest rates are sufficiently restrictive. Barkin indicated that the future path of rate changes remains uncertain as the central bank waits for additional economic data before making further policy decisions.
