Tom Barkin, president and chief executive officer of the Federal Reserve Bank of Richmond, discussed the current state and future prospects of the U.S. economy in remarks delivered on Feb. 3. Barkin said his comments reflected his own views and not those of others in the Federal Reserve System or Federal Open Market Committee.
The topic is significant as it addresses how the central bank approaches its dual mandate from Congress: maintaining stable prices and maximum employment. The Richmond Fed operates within the broader Federal Reserve System, representing a region that includes Maryland, Virginia, North Carolina, South Carolina, the District of Columbia and most of West Virginia, according to the official website.
Barkin described how inflation surged after the pandemic but noted that “the FOMC did the job Congress has asked us to do: We moved to bring inflation under control, raising the federal funds rate over 5 percentage points in 17 months.” He acknowledged concerns about recession but pointed out that “inflation started falling back toward our 2 percent target while the economy and labor market remained impressively resilient.” According to Barkin, recent data show third quarter gross domestic product growth at a strong rate of 4.4 percent with consumer spending remaining healthy through fall.
He highlighted challenges faced in 2025 due to geopolitical tensions, advances in artificial intelligence technology, government policy changes such as tariffs and deregulation efforts, as well as an extended government shutdown that limited access to data. Despite these factors creating uncertainty—likened by Barkin to driving through dense fog—he observed signs that conditions are improving: “as we move into 2026…the road ahead is coming back into focus…we are seeing an economy that remains remarkably resilient.” The Richmond Fed connects with communities through economic education and development initiatives according to its official website.
Barkin emphasized ongoing risks including potential volatility from new technologies like AI or shifts in policy mix but expressed cautious optimism about continued progress toward price stability. He also raised concerns about labor supply due to declining fertility rates and lower net migration: “When I zoom out…our labor supply is one of my top concerns.” The bank works for Americans by promoting a sound financial system through its central banking operations according to its official website.
Looking forward on monetary policy actions taken so far—including reducing interest rates by 175 basis points over eighteen months—Barkin said: “I think of these cuts as having taken out some insurance to support the labor market as we work to complete the last mile to bring inflation back to target.” The Richmond Fed’s efforts encompass ensuring financial institutions operate safely across its district coverage area according to information available on their official website.
