On January 4, Richmond Fed President Barkin delivered a speech: The basic outlook for 2025 is positive, and the upside risks to growth outweigh the downside risks. Inflation has not yet returned to the target level, and more efforts are still needed. As long as employment and asset values ​​remain strong, consumers will continue to consume. The story of 2025 will focus less on monetary policy and more on economic fundamentals, and perhaps geopolitics. The Fed is fully prepared to respond no matter how the economy develops. Uncertainty in financial markets seems to have declined, and market forecasts for the policy path are consistent with the Fed’s median expectations. There is a growing recognition that long-term interest rates may not fall as sharply as once hoped. The labor market is more inclined to increase hiring rather than layoffs. There are some potential upside risks to inflation.

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