Thomas Barkin, president of the Federal Reserve Bank of Richmond, said he expected high interest rates to slow the economy further and bring inflation down to 2%.PlayandearnblockchaingamesThe target level.

Barkin, which has a vote on monetary policy this year, said on Monday that the strong performance of the labour market had given the Fed time to wait until it was convinced that inflation would continue to fall before cutting interest rates. However, he added that persistent inflation in housing and services could keep prices high, as was the case this year.

Thomas Barkin, president of the Richmond Federal Reserve

"I am optimistic that today's restrictive interest rates will dampen demand and bring inflation back to our target," Barkin said in a speech to the Rotary Club of Colombia in South Carolina. "the full impact of high interest rates has not yet been seen."

Fed officials left the benchmark interest rate unchanged at more than 20-year highs last week. After the interest rate decision was announced, Federal Reserve Chairman Jerome Powell said recent inflation data did not make the committee more confident about cutting interest rates. He did not say when he thought the Fed would cut interest rates.

The Richmond Fed president said sellers were still trying to raise prices and would continue to do so until customers strongly opposed it.

"the risk is that as the help we get from the commodity sector weakens, persistent inflation in the housing and services sector will push the overall index above our target," Barkin said. "this is what we have seen so far this year."

A core price indicator favored by the Federal Reserve rose 2% in March from a year earlier.Playandearnblockchaingames.7%, up from 2.5% in February. Barkin called the inflation figures for early 2024 "disappointing".