Richmond Federal Reserve President Thomas I. Barkin offered a sobering assessment of the US economic outlook, warning that the fog surrounding the economy hasn’t cleared. It’s gotten thicker.
Speaking at East Tennessee State University on March 27, Barkin used the metaphor of “driving through fog” to describe the challenge facing policymakers. Some of the policy questions from 2025 have seen partial answers, he acknowledged, but the overall picture has grown murkier. His exact framing: “the fog has lifted. If anything, it’s deepened and spread.”
The numbers behind the fog
On paper, certain indicators look decent. Unemployment sits at roughly 4.4%, consumer spending remains positive, and GDP grew at around 2% over the previous year.
But the cracks are harder to ignore. Inflation remains nearly a full percentage point above the Fed’s 2% target. That’s a meaningful gap for a central bank that has spent years trying to wrestle price growth back under control after it peaked above 7% in 2022.
