Fed's Bullard: Rate Cut Supports Labor Market, Inflation Task Still Awaits Final Step

February 3 (Tuesday) — Richmond Federal Reserve President Tom Barkin said Tuesday the Fed’s rate cuts so far have helped "insure" the labor market’s health, as policymakers work to finish the "last mile" of getting inflation back to the 2% target. Barkin noted the Fed has cut rates by 1.75 percentage points since fall 2024 — a move that "provides some insurance to support the labor market as we work through the final stages of hitting our inflation goal." The unemployment rate remains historically low, he added, while inflation is still about 1 percentage point above the 2% target but expected to ease in coming months. "Inflation has been above our target since 2021, and I take this persistent deviation very seriously," he said. "No matter the reasons, today’s inflation data will impact tomorrow’s inflation." Barkin projected the economy will stay resilient in 2026, with regulatory easing and tax cuts delivering "significant stimulus" and businesses retaining confidence in sustained demand. A recent jump in productivity will also help cool inflation, he noted: "Firms facing higher input costs have more capacity to absorb them, so pricing pressures are relatively contained." (Source: FXStreet)