The Richmond Fed chief said lower oil prices after the Israel-Iran ceasefire could ease some near-term pressure, but inflation has broadened beyond energy and the Fed left rates unchanged this month.
Federal Reserve Bank of Richmond President Thomas Barkin said inflation remains too high after the personal consumption expenditures index, the Fed’s preferred inflation gauge, rose 5.4% in the year through May, the highest reading since April 2023. Speaking at the Aspen Ideas Festival on June 29, he said lower oil prices following the Israel-Iran ceasefire may help relieve some near-term pressure, but price increases have spread beyond energy. Barkin’s comments come as the Federal Reserve held interest rates steady this month while some officials continued to see a case for additional rate hikes later this year if inflation does not cool. His remarks underscore the central bank’s concern that a broader-based inflation pickup could prove harder to reverse even if energy costs moderate.