Thomas Barkin Allowed Gradual Rate Increase by the Fed

Thomas Barkin, President of the Federal Reserve Bank of Richmond, on November 5, 2026, suggested the possibility of further interest rate hikes by the U.S. Federal Reserve. Speaking at an event for financial directors, he noted that inflation remains too high, and gradual monetary policy tightening allows for adjustments based on changes in the economic situation.

According to Barkin, he does not anticipate a new acceleration of inflation in the near term, but he does not yet see signs of its sustained decline. Meanwhile, demand in the U.S. economy remains strong, and the labor market situation does not indicate a sharp deterioration in employment conditions.

"Unemployment is near historic lows, and inflation is too high. Therefore, the direction of policy is quite clear. The question is about the pace," Barkin stated.

He believes that a gradual approach to raising rates allows the regulator to gather additional economic data between decisions and assess the impact of measures already taken. However, Barkin did not specify the exact size and timing of the next hikes.

According to the U.S. Bureau of Labor Statistics, consumer inflation in September 2026 was 3.7% year-over-year compared to 3.4% in August. Prices rose by 0.6% over the month, with more than half of the monthly increase attributed to the rise in gasoline prices.

The core consumer price index, excluding food and energy, increased by 2.6% year-over-year. This indicates continued price pressure beyond the energy sector.

At the meeting on October 27–28, the Federal Open Market Committee maintained the target range for the federal funds rate at 3.75–4.00%. The decision was supported by ten participants, while two advocated for a 25 basis point increase.

In the official FOMC statement, it was noted that inflation remains elevated, and further decisions will depend on new economic data. The Fed's target is 2%.

Barkin also pointed out that investments in artificial intelligence infrastructure support economic demand but may create additional price pressure in the short term.

The next FOMC meeting is scheduled for December 8–9, 2026. The committee will need to assess new indicators of inflation, employment, and economic activity. Barkin's statements reflect his own position and do not imply that a decision on the next rate hike has already been made.