Fed’s Barkin Says Rates Should Move With Care as Inflation Stays the Main Risk
Direct answer
Richmond Federal Reserve President Tom Barkin said on Monday, November 9, 2026 that the US central bank should move interest rates “with care” as it responds to inflation, which he called its greatest risk. With demand healthy and inflation stubbornly high, he said the direction of policy is relatively straightforward, meaning rates are more likely to rise than fall, but the pace should stay careful because jobs could still suffer. His remarks add to the case for a rate hike at the Fed’s December 8 to 9 meeting, which investors currently expect.
What happened
Barkin spoke in remarks prepared for delivery to the Greater Greer Chamber of Commerce in Greer, South Carolina, on Monday. He said businesses continue to face rising costs and are planning to try to pass them along to customers.
After nearly six years in which inflation has been above the Fed’s 2% target, “the risk lies on the inflation side of our dual mandate,” Barkin said. The Fed’s dual mandate is its two jobs: stable prices and maximum employment.
“With demand healthy and inflation stubbornly elevated, the appropriate direction of monetary policy is relatively straightforward,” Barkin said. But “it is wise to move policy with care,” he added, given risks that could hit the labor market and the Fed’s employment goal.
Barkin also spoke about artificial intelligence, calling the AI buildout “particularly consequential” for the economy. He said large swings in technology stocks, and in the odds traders attach to Fed rate rises, followed the US midterm elections last week. If the new technology “underdelivers,” he said, it could curb business investment, stock prices and consumer spending, and possibly push unemployment higher. In addition, “AI could overdeliver and displace more workers than expected,” he said.
In a question and answer session after the speech, Barkin added that the current policy rate is likely around or slightly below neutral, the level that neither slows nor stimulates the economy, and that he has no base case for the December meeting. He described the last jobs report as healthy, but said firms are still in a low hire, low fire environment, where they are neither hiring much nor laying many people off.
Barkin does not hold a vote on interest rates this year. He becomes a voting member of the Fed’s rate setting committee in 2027.
The remarks come ten days after the Fed held its benchmark rate at 3.75% to 4.00% on October 28, 2026. Since then, the data has pointed in a hawkish direction. US inflation, measured by the Fed’s preferred gauge, rose to 3.6% in September, and the economy grew at a 3.4% annual rate in the third quarter. The October jobs report, released on November 6, showed employers added 165,000 jobs, well above forecasts, while unemployment eased to 4.1%.
Barkin spoke later the same day as Chicago Fed President Austan Goolsbee, who warned that services inflation is picking up and that inflation, not jobs, is the Fed’s big problem. For more on that, see Chicago Fed President Austan Goolsbee on services inflation. Barkin made a similar point on October 30, saying the direction of rates is straightforward and the open question is the pace, as covered in Richmond Fed President Tom Barkin on more rate hikes.
Why it matters for beginners
The Fed has two jobs, and right now they point in different directions. Prices are still rising too fast, which argues for higher rates, while the jobs market is steady but fragile, which argues for caution. Barkin is saying the Fed should lean toward higher rates, but move slowly enough to watch what happens to jobs.
His warning about businesses passing costs along matters for everyday budgets. When firms pay more for energy, materials and wages, and then raise their own prices, inflation can keep feeding on itself. That is why the Fed watches what businesses say about their costs, not just the official inflation numbers.
The AI point is also worth understanding. The AI buildout has driven huge spending on data centres and chips, which has supported growth and pushed some stock prices up sharply. If that spending slows, or if AI replaces more jobs than expected, growth and employment could suffer. Barkin is flagging that the Fed has to think about both sides of that story, not just the excitement.
A December hike would make borrowing a little more expensive, from mortgages and car loans to credit cards, while savings accounts could pay a little more. For background on the inflation data behind this debate, see our earlier post on US inflation rising to 3.6% in September.
What to watch next
The next big test comes on Tuesday, November 10, when the US releases October consumer price data. Forecasts call for headline prices to rise 0.3% on the month and core prices, which leave out food and energy, to rise 0.2%. Economists polled by Reuters expect annual inflation of 2.7%. A hotter number would strengthen the case for a December hike, while a softer number could give the Fed room to wait.
Producer price data follows on Friday, November 13. Fed Governor Christopher Waller speaks after the CPI report on Tuesday. The Fed’s December 8 to 9 meeting is the decision point, and officials will have both inflation reports in hand by then.
FAQ
Who is Tom Barkin?
He is the president of the Federal Reserve Bank of Richmond, one of the Fed’s twelve regional banks. Regional Fed presidents take part in setting interest rates. Barkin does not vote on rates in 2026, but he becomes a voting member of the rate setting committee in 2027.
What does “move with care” mean?
It means the Fed should raise rates gradually and watch the data, rather than moving fast. Barkin believes rates probably need to rise because inflation is the main risk, but moving too fast could hurt jobs.
What is the neutral rate?
It is the interest rate level that neither slows the economy down nor speeds it up. Barkin said the current policy rate is likely around or slightly below neutral, which means rates are close to the point where they stop stimulating the economy.
What is a low hire, low fire jobs market?
It describes a jobs market where firms are not hiring much, but are also not laying many people off. Unemployment stays low, but it is harder for job seekers to find new work, and the market can turn quickly if conditions change.
Will the Fed definitely raise rates in December?
No. Investors currently expect a hike at the December 8 to 9 meeting, and traders put the chance at about 84%, but the Fed decides meeting by meeting, based on new data. The October consumer price report on November 10 and producer prices on November 13 could still change the picture.
What is the Fed’s rate now?
The benchmark federal funds rate is 3.75% to 4.00%, after the Fed held rates steady on October 28, 2026. A quarter point hike in December would take it to 4.00% to 4.25%.
Sources
Reuters, November 9, 2026, “Fed should move policy ‘with care’ as it responds to inflation, Barkin says”, https://www.tradingview.com/news/reuters.com,2026:newsml_S0N45M04Q:0-fed-should-move-policy-with-care-as-it-responds-to-inflation-barkin-says/ . Dow Jones Newswires, November 9, 2026, “Barkin Says Appropriate Direction of Monetary Policy Relatively Straightforward”, https://www.morningstar.com/news/dow-jones/202611098322/barkin-says-appropriate-direction-of-monetary-policy-relatively-straightforward .
This article is for general information and education only. It is not legal or financial advice.
