(Bloomberg) -- Federal Reserve Bank of Richmond President Thomas Barkin suggested the US central bank would cut interest rates if recent progress on inflation continues, but said he’s still looking for conviction that inflation is heading back to the Fed’s 2% target.

“If you’re going to assume that inflation comes down nicely, of course we would respond appropriately,” Barkin said in a broadcast interview with Yahoo Finance. 

Barkin, who will vote on policy decisions next year, said he’s looking for “consistency and breadth” in inflation data over the next several months, and added that he sees demand for labor and inflation normalizing. 

“I don’t assume what the data is going to do” he said. “I’ve got a perspective that inflation is a little stubborner than the average person is in there. And I hope I am wrong on that.”

Policymakers kept rates unchanged for a third straight meeting on Dec. 13 and signaled they expect three rate cuts next year, according to their median rate forecast released after the policy meeting. Markets responded by moving forward their bets for rate cuts, with the first cut seen likely in March, though several Fed officials have tried to tamp down expectations for steep reductions in early 2024.

Read More: Fed Officials Add to Chorus Pushing Back Against Rate-Cut Bets

Consumer price data published last week showed that underlying inflation fell below 3% on a six-month annualized basis for the first time since 2021. Updated data on wholesale cost pressures also painted a favorable picture for a key inflation gauge watched closely by the central bank. 

A report due Friday will show how the Fed’s preferred gauge fared in November.

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