Fed's Barkin: Positive outlook for 2025, no need to take previous restrictive measures

In a prepared speech, Fed Chairman Barkin said his baseline outlook for 2025 is positive: "I expect more upside than downside to economic growth." He added that expectations for economic expansion may be the reason for the recent rebound in business optimism. Part of his optimism about the economic outlook is that he believes the momentum in consumer spending could keep the economy healthy in the coming months. "With business optimism high and the labor supply unlikely to continue to grow so strongly, the current labor market balance is more likely to move in the direction of hiring rather than layoffs," Barkin said. He also predicted that the more cost-conscious consumers that have emerged in recent months will put pressure on businesses to limit price increases, which should continue to hold down inflation. But he also noted that inflation has not yet returned to the Fed's 2% target: "We have more work to do, but we don't think we need to be as restrictive as before to get the job done." (Jin Shi)