Federal Reserve’s Barkin warns of persistent inflation risks

Five years is a long time to miss a target. Thomas Barkin, president of the Federal Reserve Bank of Richmond, made that point bluntly on May 21, 2026, noting that inflation has sat above the Fed’s 2% goal for more than half a decade. Barkin’s concern is less about any single month’s data and more about what persistent overshoot does to expectations. When businesses and consumers stop believing that prices will eventually settle back toward 2%, they start behaving accordingly, demanding higher wages, pre-emptively raising prices, and locking in contracts that embed inflation rather than resist it. The numbers behind the worry Headline PCE, the Fed’s preferred inflation gauge, came in at 3.5% as of March 2026. Core PCE, which strips out food and energy to give a cleaner read on underlying price trends, stood at 3.7% by mid-August 2026. Both figures sit nearly twice the Fed’s stated target. Barkin traced the origins of the problem to a chain of supply shocks: first the COVID-19 pandemic, then Russia’s invasion of Ukraine, and more recently the knock-on effects of shifting tariff policies. Each disruption alone might have been manageable. Stacked on top of one another across several ye...