Fed’s Barkin: don’t expect quick return to stable economy

RICHMOND, Virginia, June 21 (Reuters) – There will be no rapid return for the US economy to the experience of the previous decade of stable growth, jobs and inflation, Richmond Federal Reserve President Thomas Barkin said on Tuesday.

“We’re about two years into a quite unstable time,” Barkin told reporters following an event in Richmond, Virginia. “It seems to me highly unlikely you go from very stable to very volatile to very stable again…continued volatility around some of these economic indicators is a more likely scenario than a return to that kind of stability.”

That means there could be some months, or even quarters ahead, when inflation readings will oscillate between pre-pandemic levels and higher ones, Barkin said. There also is a real possibility that de-globalization and systemic labor market shortages could cause persistent headwinds to keeping inflation down.

“That’s a risk I am very attuned to,” he said.

Earlier on Tuesday at a separate event, Barkin said he saw an interest rate increase of 50 or 75 basis points at the US central bank’s next meeting in July as “pretty reasonable.”

(Reporting by Katanga Johnson; writing by Lindsay Dunsmuir; Editing by Dan Burns)