Fed's Barkin: At this point risk of inflation festering feels bigger than that of Fed doing too much

tweet at 12:17pm: FED'S BARKIN: SAYS INFLATION PROGRESS WON'T BE PREDICTABLE, FED TO "PERSIST" WITH TIGHER POLICY AND NOT "DECLARE VICTORY PREMATURELY" tweet at 12:21pm: *FED'S BARKIN CITES SUPPLY IMPROVEMENTS AND EASIER HIRING: THE VIEW AMONG EXECUTIVES IS THAT PRICING POWER IS ONLY TEMPORARY AS EVIDENCE THAT INFLATION PROGRESS IS ON THE WAY. tweet at 12:32pm: FED'S BARKIN: COMFORTABLE WITH PACE OF RATE HIKES, A "GOOD NEWS" STORY IF FED DOES A BIT TOO MUCH AND INFLATION COMES DOWNBarkin: What’s Driving Inflation? Thanks for having me. Today, I want to talk about the economy, but I also want to take a step back and reflect on how we got here and where we might be headed. These views are mine alone and not necessarily those of anyone else in the Federal Reserve System. The U.S. Economy Today: I think you all know where the economy is today. We’ve seen a historically strong recovery from the short but deep 2020 recession. GDP surpassed its pre-pandemic level in the first quarter of 2021. Employment did so in August of this year, and the unemployment rate has basically come back to its low pre-COVID levels. While there is a lot of talk about a recession, the strength of the labor market suggests that is still premature. But, despite the good news that the worst of the virus seems behind us, we have not yet returned to normal. Supply chains remain strained as firms struggle to meet ever-shifting levels of demand with unstable production capacity. Employers are short workers, partly due to lower immigration and excess retirements. The war in Ukraine and widespread drought conditions are affecting commodity supply. And, of course, for the first time in a generation, we are grappling with high, broad-based and persistent inflation. The Consumer Price Index is at 8.3 percent. The Fed’s preferred metric, the Personal Consumption Expenditures Price Index, is 6.2 percent headline and 4.9 percent core. Both are near 40-year highs. How We Got Here The resurgence of inflation is particularly noteworth