Jinse Finance

金色财经是集行业新闻、资讯、行情、数据等一站式 #Web3 区块链产业服务平台。(The leading #blockchain and #crypto media from 2016 in China.）聚焦 #Web3、#Metaverse、 #BTC、#ETH、#NFT、#DeFi、#DAO。

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💡Federal Reserve's Barkin: Rate hike direction is clear, AI risks require more cautious policy pacing According to Jinse Finance, Richmond Fed President Tom Barkin stated that U.S. demand remains healthy and inflation stubbornly high, so the direction for monetary policy is relatively clear, but demand outlook still carries risks, and the Fed should be cautious when adjusting policy. Barkin's speech in South Carolina signaled that interest rates still need to rise, while emphasizing the need for a prudent pace of rate hikes. He spoke to the Greater Greer Chamber of Commerce that day and will become a voting member of the Federal Open Market Committee in 2027. The Fed unanimously agreed to raise rates by 25 basis points in September, raising the federal funds target range to 3.75% to 4%; in October, it decided to keep rates unchanged with 10 votes in favor and 2 against, stating more information is needed to determine the appropriate policy level. Barkin said inflation has been above the Fed's 2% target for nearly six years, and the main risk to the dual mandate currently centers on inflation. Corporate profits are strong, consumers continue spending, and the unemployment rate has remained at or below 4.5% for a record duration. According to The Wall Street Journal, Barkin believes that demand resilience combined with broad cost increases is pushing prices higher. Businesses have told the Fed that cost pressures persist, so they plan to pass on some costs previously absorbed themselves. He expects consumer spending to remain resilient through year-end, with the market generally anticipating a strong holiday shopping season, but how long this strong consumption momentum can last remains a question. Chicago Fed President Goolsbee also said in Chicago that inflation pressures are spreading, with some service prices less tied to energy and tariffs also rising. He believes AI data center construction is beginning to show signs of traditional demand overheating, which central banks usually need to respond to forcefully. Barkin focused more on potential demand changes brought by the AI boom. If technology underperforms expectations, corporate investment may contract, stock prices may fall, and consumption supported by asset appreciation may also decline. Another risk is AI outperforming expectations, with more labor displaced than initially estimated, which could also reduce spending. He said both scenarios would shift the Fed's focus back to the full employment goal. The market currently leans toward a rate hike in December. Bloomberg reported Monday that traders price the probability of a December hike at about 80%. The Fed's next policy meeting is scheduled for December 8-9, preceded by a jobs report and more inflation data. Russell Investments Senior Investment Strategist BeiChen Lin said that after strong employment reports and other data showing economic resilience, the Fed will have little patience for inflation.