Barkin says cost pressures are hitting a lot of US businesses but gives no sign of his next move

The Richmond Fed president casts the debate as one of pace, not direction, leaving him apart from colleagues pressing for tightening.

Richmond Fed president Tom Barkin says cost pressures are hitting a lot of US businesses, but he gives no hint of where he would move next. He describes the fight against inflation as a question of pace rather than direction, which keeps him apart from Hammack, Goolsbee and Collins, who are pushing for tightening.

The remark adds little to a committee already divided. The Fed held its key rate at 3.75-4.00 per cent on a 10-2 vote, with Cook and Hammack voting for an increase. September PCE inflation, the Fed's preferred gauge, eased to 3.1 per cent against 3.6 per cent expected, yet the monthly readings in the same release picked up pace, with the monthly rate accelerating to 0.5%. The annual figure flatters; the monthly one is the worry.

Barkin's own record points the same way. He backed the September hike, and he said then that inflation risk outweighed jobs risk. He also said he wanted this cycle to resemble the mid-cycle adjustment of the 1990s, not a prolonged tightening campaign. That is a view about how far and how fast, and it is why a comment on cost pressures does not settle which side he joins if the data turn.

The Beige Book gives the backdrop: price growth was robust in three districts and intensifying in three more, with eight calling it moderate. Banks are already betting on more. BofA expects 25 basis points of tightening in December and again in March 2027, and JPMorgan's Yuxuan Tang expects hikes in December and the first quarter, which he says would take the 10-year Treasury yield to 5.25-5.5% by midyear.

So long-dated Treasury yields stay tied to the next inflation print, not to this remark. Until a number forces the committee's hand, Barkin's pace-not-direction line leaves the December question open.