According to the Zhitong Finance APP, Thomas Barkin, president of the Federal Reserve Bank of Richmond, stated that whether military conflicts between the U.S. and Iran will change the Federal Reserve's monetary policy path depends largely on the duration of their impact on the U.S. economy.
In a television interview on Thursday, Barkin noted that changes in energy prices will be one of the important factors in assessing policy. &#34;An increase in gasoline prices will obviously bring inflationary pressure,&#34; he said. &#34;From a textbook monetary policy perspective, if it is a short-term shock, the central bank usually chooses to 'look through' its effects, but if the shock is long-term, it cannot be ignored. I think this is the core issue that policymakers need to assess.&#34;
The Federal Reserve's next policy meeting will be held on March 17-18. Several officials have previously hinted that policymakers may keep interest rates unchanged for the second consecutive time before inflation further declines. Data shows that the Fed's preferred inflation measure rose 2.9% year-on-year in December last year, still significantly above its long-term target of 2%.
Barkin pointed out that recent and upcoming data indicate that &#34;inflation levels over the past few months have been relatively high,&#34; which means it is still too early to conclude that anti-inflation actions have ended. &#34;This will undoubtedly lead people to pause any conclusions that we have finished the fight against inflation.&#34;
Regarding employment, Federal Reserve officials generally believe that the labor market is stabilizing, which has made policymakers more cautious about further easing after three consecutive rate cuts at the end of last year. Barkin stated that the reason for the rate cuts last year was that decision-makers believed the downside risks facing the labor market had increased, while the risks of inflation rising again had decreased.
However, he noted that data from recent months seems to indicate that the risk balance &#34;is moving in the other direction.&#34;
The latest data released on Thursday showed that initial jobless claims in the U.S. remained basically unchanged last week, but the number of people continuing to claim unemployment benefits, seen as an important indicator of the number of beneficiaries, saw the largest increase this year.
Nevertheless, Barkin stated that the recent employment data overall remains &#34;reassuring.&#34;
When discussing the future leadership of the Federal Reserve, Barkin expressed his anticipation of working with Kevin Warsh. President Trump has nominated the former Fed governor to succeed Jerome Powell as Fed chair when Powell's term ends in May.
There is widespread expectation that if Warsh takes office, he will face pressure from the White House to cut rates, as Trump has previously made it clear that he hopes the new chair will promote a more accommodative rate policy. Warsh has also publicly advocated in recent months that the Fed could create space for further rate cuts by reducing its current balance sheet of about $6.6 trillion.
In response, Barkin stated on Thursday that he is open in principle to reducing the Fed's influence in financial markets. He said, &#34;Intuitively, I agree that the Fed should have a smaller 'footprint' in financial markets.&#34; However, this is contingent on still being able to effectively implement monetary policy, stabilize rates, and avoid causing severe shocks to financial markets

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The President of the Federal Reserve Bank of Richmond, Thomas Barkin, stated that the impact of military conflict between the U.S. and Iran on the Federal Reserve's monetary policy depends on the duration of the conflict and its effects on the U.S. economy. He pointed out that changes in energy prices are an important factor in assessing policy, and rising gasoline prices could bring inflationary pressures. Barkin believes that short-term shocks can be ignored, but long-term shocks need to be taken seriously. The next Federal Reserve meeting will be held in March, and officials are cautious about further interest rate cuts

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Richmond Fed President: The impact of the Middle East conflict on monetary policy depends on its duration, and changes in energy prices are one of the important factors