Federal Reserve Bank of Richmond President Thomas Barkin stated on Tuesday, Sept. 22, 2026, that inflation could potentially decrease in "short order." Speaking to the Baltimore branch of the CFA Society, Barkin noted that while he is open to a decline in prices, he also acknowledged the possibility that inflation could remain elevated due to ongoing international conflict and various supply-chain pressures.
The remarks follow the Federal Open Market Committee's (FOMC) decision last week to raise the benchmark interest rate by a quarter point to a range of 3.75% to 4%. This action represented the first rate hike since July 2023. Annual inflation, measured by the Consumer Price Index (CPI), rose to 3.4% last month, up from 2.4% in February 2026, having peaked at 4.2% in May.
Barkin, who is not currently a voting member of the FOMC but will become one next year, explained that the central bank needed to act to return inflation to its 2% target. He identified several factors contributing to price pressures, including the Iran war, tariffs on foreign imports, and costs associated with the build-out of artificial intelligence (AI). According to Barkin, more than 60% of the Personal Consumption Expenditures (PCE) price index rose by more than 3% year-over-year in July.
The Richmond Fed president reported that firms expect to raise prices by 4.1% next year, a figure more than double the 2019 average. While Barkin suggested a potential for inflation to fall toward the 2% target if consumer spending reaches a limit or unemployment rises, he warned that "shocks" such as oil price volatility and tariffs could make inflation more "stubborn."
As 16 of 18 FOMC officials have projected at least one more rate hike before the end of 2026, the committee is scheduled to meet twice more this year, in late October and early December, to evaluate whether additional increases are necessary.
The FOMC will hold its next two policy meetings in late October and early December 2026. During these sessions, members will review updated economic data to determine if the 2% inflation target is being met sustainably or if further rate increases are required. Thomas Barkin is scheduled to join the committee as a voting member in 2027.