MNI EXCLUSIVE: MNI Interview With Counselor to the U.S. Treasury Secretary

Richmond Fed President Barkin (non-2025/26 FOMC voter, leans hawkish) tells Bloomberg that his expectation of "modest movement in the economy" implies a "modest adjustment in rates". 

• That said, “I don’t know that there will be modest movement in the economy. That’s what we’re going to have to see when we get there. So, that’s my forecast, but the forecast could change.”
• On the September decision: “I know I have three-and-a-half weeks before our next meeting... I make the best call I can on the day, with all the information.”
• Barkin is almost never explicit about his rate views and the interview writeup is a little unclear as it implies he's talking about activity over the remainder of the year, thereby implying that he may envisage a cut by year-end.
• That said, since the June FOMC meeting we have penciled Barkin in as one of the 7 most hawkish members of the FOMC this year (not seeing any cuts) and one of the 6 most in terms of expected cuts by end-2026: we think he is one the 5 dots in the June SEP that shows a total of 50bp of cuts by then (to 3.9%; there is one dot above that level, at 4.1%).

MNI interviews Fed governor nominee Stephen Miran on his economic outlook. -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com

Retail sales remained robust into late August, with the Johnson Redbook index up 6.5% in the week ending Aug 23, after 5.9% the prior week. That brings month-to-date sales growth to 6.0% Y/Y, getting closer to retailers' targeted 6.2%.

• Anecdotes from the report noted higher prices resulting from tariffs, which spurred traffic at discount stores: "Back-to-school sales were active last week as the start of the school year approaches. Apparel and accessories sales, particularly from private labels, performed well in the Southern and Midwestern regions, where the school year begins earlier. Shoppers are purchasing items closer to the time they need them. Most of the Trump administration's tariffs took effect at the beginning of August, leading to higher prices. As a result, shoppers—especially those with lower incomes—tend to seek bargains at large discount stores, which have significant supply chain advantages that allow them to maintain lower prices. Additionally, the positive effects of state tax holidays were evident in the sales results for Connecticut."
• Despite continued weakness in consumer sentiment, retail sales growth looks as though it is remaining steady in August.
• That's even if the Redbook (along with the "official" Census Bureau) data, which is in nominal terms, is somewhat exaggerated due to price differences, at 4-6% nominal growth, price-adjusted volumes are likely still firmly positive (total Census Bureau advance retail sales were up 3.9% Y/Y in July, with ex-autos/gas up 4.4% and control group 4.8%).
• We will get a little more insight on recent spending trends with Friday's PCE spending data for July.