Fed's Barkin: Inflation still 'stubbornly high' and isn't easing fast enough toward 2% target

Inflation remains “stubbornly high” and is no longer making much progress toward the Federal Reserve's 2% target, a top Fed official said Wednesday, hours after price data for April were released.

In an interview, Tom Barkin, president of the Federal Reserve Bank of Richmond, said he is also seeing some signs that banks in his region — which includes Virginia, North Carolina, South Carolina and West Virginia — are slowing their lending. It isn't yet clear, he said, what consequences that trend might have on the economy and inflation.

For now, Barkin said, inflation remains unacceptably high. A government report Wednesday on consumer prices in April showed that inflation fell to 4.9%, the lowest year-over-year level in two years. Yet excluding volatile food and energy costs, inflation stayed high from March to April and was up 5.5% from a year earlier, little changed since December.

Barkin noted that the latest figures reflected some one-time fluctuations — sharp drops in airline fares and hotel room prices, for example, and a spike in the cost of used cars — that may not persist.