Thomas Barkin said the Federal Reserve may need to tighten policy further if that is required to return inflation to 2%, underscoring a harder line as price pressures remain above target. In a July 2026 interview with the Wall Street Journal, the Richmond Fed President described the current stance as a "close call" and said he is not convinced interest rates are high enough to finish the job. The warning followed a March 2026 headline PCE (Personal Consumption Expenditures inflation gauge) reading of 3.5% year-over-year, after inflation had been running around 2.7% in late 2025 and early 2026. Barkin also said in a May 21, 2026 speech that inflation has stayed above the Fed's 2% objective for more than five years, raising the risk that long-term inflation expectations become unanchored. He pointed to supply shocks as an added complication because they can generate inflation that monetary policy cannot easily offset on its own. The Fed formally adopted its 2% goal in January 2012 and shifted to flexible average inflation targeting in 2020, a framework built for an era of too-low inflation. Barkin's remarks were presented as consistent with broader FOMC (Federal Open Market Committee, the Fed's policy-setting body) messaging that the 2% target is not up for renegotiation. For markets, especially fixed-income investors, the combination of a 3.5% PCE reading and unresolved debate inside the FOMC suggests that expectations for a long pause or eventual rate cuts could be challenged if upcoming PCE data and remarks from Fed Chair Jerome Powell or other governors begin to echo Barkin's hawkish tone.