In Lexington, Virginia, Richmond Fed President, Tom Barkin, stated that the Federal Reserve's current monetary policy is appropriately "moderately restrictive" due to the uncertain environment and rapid changes in U.S. government policies. He mentioned that the recent tariffs announced by President Trump could possibly lead to higher inflation but also acknowledged that the impact might be balanced out by upcoming tax and regulatory policies.

Barkin emphasized that the fast-paced policies of the new administration have put businesses and consumers in a state of uncertainty, affecting their spending and investment decisions. He stressed the importance of maintaining confidence for economic growth and stability in financial markets.

He likened the current situation to a dense fog of uncertainty, requiring caution and readiness to adapt. The Fed's decision to keep interest rates steady reflects their strategy to wait for clearer economic conditions before making adjustments.

Barkin concluded that as long as the labor market remains strong and inflation stays above target, the Fed's moderately restrictive stance is appropriate. They remain prepared to respond if conditions change.