MNI BRIEF: Fed's Barr Hasn't Made Decision On Dec But Cautious

Federal Reserve Governor Michael Barr on Tuesday said he has not made up his mind about interest rates when it comes to the central bank's meeting in December, but noted he will be cautious because inflation is still running at 3%. 

"I guess what I would say is I haven't made any decision about December, but I think we need to be quite cautious, given that inflation has remained elevated over this last year," he said in Q&A at an event at American University in Washington.

"What we're trying to do is balance these two concerns we have," he said about inflation that is running above target and hiring that is at a pace below the breakeven rate. "Congress gave us what's called a dual mandate at the Federal Reserve. We're supposed to pursue maximum employment and price stability, and right now those goals are in tension." (See: MNI INTERVIEW: High Bar For More Cuts As Neutral Nears-Kaplan) 

Barr said the Fed is at a judgement point. "We have to decide what is the appropriate thing next. I'll be looking carefully at the data that's coming in between now and the December meeting. We should have another report on Friday. We'll have some additional data, perhaps beyond that before the December meeting." 

He added that goods prices have continued climbing while services inflation excluding housing "may be in a state where it is stalled out." Inflation is running close to 3% right now, and "we want it to be 2%. We're committed to getting inflation down to 2%. I'm concerned that we haven't yet met that objective. There's more work to do."