Richmond Federal Reserve President Tom Barkin said the U.S. has avoided a recession largely because of pandemic-related changes in the economy, but growth is likely to slow soon due to higher interest rates. “Further slowing is almost surely on the horizon. A number of pandemic-era fiscal support programs are ending. Rate increases work with a lag. Many models estimate their impact should start to really hit around now,” Barkin said Friday in a speech in Blacksburg, Va. on Thursday morning.
In a prepared text, Barkin also said inflation “remains too high,” but he did not give any indication whether he would support another increase in interest rates in September at the Fed’s next big meeting. Barkin is not a voting member this year of the Fed’s interest-rate setting panel. The Fed last week raised a key short-term interest rate for the 11th time in less than a year in a half. That brought the rate up to a top end of 5.5% from near zero in the spring of 2022. The central bank has been trying to slow inflation without tipping the economy into a recession. Higher borrowing costs typically depress economi …
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