President of the Federal Reserve Bank of Richmond Tom Barkin stated on Thursday that the U.S. central bank is making great progress but needs to keep it going.
The official noted that there is still more demand for housing than supply. He also expressed the view that the better way to address housing imbalance at this point is to build more, not suppress demand.
Regarding labour market conditions, Barkin said that the current level of unemployment is fine, and whether it is normalizing or weakening is something still to be determined. He added that companies continue to feel labour is short on a long-term basis, and are not firing though job growth is slowing.
Richmond Fed chief also highlighted that the U.S. is only advanced economy where GDP is now beyond the pre-pandemic trend. Barkin noted that the drivers of growth include wealth effects for higher-income families, low unemployment, and real wage increases.
The official, however, warned that the biggest risk to growth is probably the unemployment rate, as a cycle of layoffs would dampen spending. Also, he suggested that a significant market correction could cause families with more net worth to slow consumption.
Barkin also said that it is hard to assess the impact of tariffs, but there will be some amount of cost pressure, and some movement of jobs, depending on what is implemented.