Fed's Barr says 2% inflation target needs policy adjustment
Barr's comment repeats what he said on September 23, as the 10-year Treasury yield sits above 5.2%.
Published
Chart: US10Y, US 10-year Treasury yield, one-minute prices, three sessions
Federal Reserve Governor Michael Barr said the central bank will not reach its 2% inflation target in a timely way unless it adjusts policy. He made nearly the same point on September 23.
The remark lands in a market that has already priced in a hawkish Fed. The 10-year Treasury yield rose seven basis points to 5.23% on Monday, its highest since 2007, and benchmark yields have climbed almost 65 basis points since the end of August. Money markets are betting on three more rate hikes over the next year. The dollar gained on Monday while gold fell 3.9% to $4,118.66 the same day.
Barr's comment follows similar statements in recent days from Fed officials including Musalem, Goolsbee, Collins, Barkin, Cook and Powell. Cook has said the labor market looks able to withstand higher interest rates, even as she watches for job losses driven by artificial intelligence, and that future Fed moves will depend on incoming data.
Barr's repetition confirms rather than shifts that trajectory. Equities and gold have already absorbed the higher-for-longer framing, so for investors with money on the table, the backdrop stays where it was rather than turning more hawkish.