Fed's Barkin (2027 voter) says Fed is well positioned to respond to risks as appropriate. Whether the Fed needs to hike rates depends on how businesses and consumers react to developing conditions.

Policy of looking through supply shocks has worked well in the past, but easy to see more challenging conditions and more frequent shocks in the future. Long-term inflation expectations appear to remain contained. Consumers are “not happy” but continue to spend; businesses are so far managing productivity improvements through attrition and not layoffs. Before tariffs and the rise in oil prices, the Fed was basically there on meeting the inflation target.