Federal Reserve Barkin: The full impact of interest rate hikes has not yet been fully realized

On May 7, Federal Reserve Barkin said he expects high interest rates to further slow economic growth and bring inflation down to its 2 percent target. Barkin said the strong performance of the labor market gives the Fed time to gain confidence that inflation will continue to decline before cutting interest rates. But he added that persistent housing and services inflation could keep price increases high. "I am optimistic that today's restrictive interest rate level can reduce demand and thus bring inflation back to our target level." "The full impact of the rate hike is yet to be felt." Barkin said businesses are still working to raise prices. " The risk is that continued inflation in housing and services will push the headline index above our target as we receive less help from the goods sector. "