Fed's Barkin (2027 voter) says it is hard to know whether policy is restrictive given the uncertainty around economic models

Barkin says continued slowing in headline inflation would help keep expectations in check. He is torn between inflation having remained above target for more than five years and the fact that it rose in two separate episodes and is now slowing. Businesses generally prefer to avoid layoffs, even when they are cautious about hiring. Do believe in the theory that if you help people understand the reaction function it helps markets do their job, but also think that guiding too carefully leads to constraints. He worries about how long lower-end consumer spending can hold up. The labour market is not as strong as the data suggest and considers it vulnerable. He worries about how long lower-end consumer spending can hold up. Many AI use cases do not seem mature enough yet to lead to large reductions in headcount.