Get caught up.
by David Rovella
Bloomberg.com
Wait for it. That’s the message from Federal Reserve Bank of Richmond President Thomas Barkin, who said he expects high interest rates to eventually cool US inflation to the central bank’s 2% target. Barkin said Monday the strength of the labor market offers the Fed time to gain confidence that inflation is moving sustainably lower before cutting borrowing costs. But he cautioned that there still is risk that continued housing and services inflation will keep price gains elevated. Sellers are still trying to raise prices, he warned, and they will do so until customers push back strongly. “The risk is that, as we get less help from the goods sector, continued shelter and services inflation will leave the overall index higher than our target,” Barkin said.
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Fixed income is living up to its name. And it shouldn’t be a surprise given US benchmark rates jumped from 0% to more than 5% in the span of just two years.