Richmond Federal Reserve Bank President Thomas Barkin said on Thursday that he expects the Federal Reserve to raise interest rates further, but he is not sure by how much or at what pace.
During the 2026 CFO Summit of the Richmond Federal Reserve, Ba Jin stated in an interview with CNBC that he is concerned about inflation and argued that monetary policy needs to be adjusted.
"The unemployment rate is near historic lows, yet inflation is too high. This means the path forward is quite clear. Of course, the issue lies in the pace," said Ba Jin in a conversation with Steve Riesman from CNBC.
"If you think the world is full of uncertainties and that you will gain more information over this period of time, then a gradual approach is reasonable. I still think that's the appropriate pace for me," he added.
Ba Jin's remarks were made slightly over a week after his colleagues voted to maintain the Federal Reserve's benchmark overnight lending rate in the range of 3.75% to 4%. Although Ba Jin is not currently a voting member of the Federal Open Market Committee (FOMC) responsible for setting interest rates, he will become a voting member in 2027.
In the post-meeting statement, FOMC indicated that when discussing the next steps, there was a wait for “further accumulation of information.” When the 25-basis-point rate hike was approved in September, officials generally believed that another interest rate increase might be possible before the end of 2026.
Ba Jin stated that he believes the current policy is close to a level that neither suppresses nor stimulates growth, which is what officials refer to as a neutral interest rate.
"If you are restricting the economy, in theory you are also restricting consumption, and consumption accounts for roughly two-thirds of the economy, so this level of restriction is relatively high," he said. "Therefore, it might lead one to think that we might be a bit too lenient to some extent."
He added that inflation "is the most important risk at present... I hope that our actions in September, as well as any other measures we may choose to take in the future, will have some impact on inflation."
He stated that artificial intelligence is a source of price pressure, but in the long run, it will ultimately drive production and help to alleviate inflation in the distant future.
According to CME Group's FedWatch tool, the market is currently betting that the probability of a rate hike in December exceeds 80%, and it is expected that there will be another move in 2027 as well.
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