Overview
- Richmond Fed President Thomas Barkin, who spoke Friday in Tennessee, said the Iran war and rapid AI rollouts have deepened the “fog” over the outlook.
- He backed last week’s decision to leave rates unchanged and said it is prudent to wait for clearer signals.
- Barkin described demand as narrow, driven by AI investment and higher‑income spending, and he said the labor market looks fragile despite steady headline numbers.
- Philadelphia Fed President Anna Paulson said the Middle East conflict adds risks to both inflation and growth as the Fed’s preferred gauge runs about one percentage point above the 2% goal.
- Investors have largely priced out near‑term cuts and increased the odds of a rate hike, with some traders assigning roughly a 40% chance by October.