Ann Saphir/Reuters
The comments come after investors fervently dumped Treasurys amid boosted expectations for consumer-price growth.
Businesses in the Richmond area don t seem to be raising prices at an unhealthy rate, Barkin added.
Concerns of rampant consumer-price growth and the resulting sell-off in the Treasury market were natural but missed the bigger picture, Thomas Barkin, president of the Federal Reserve Bank of Richmond, said Monday.
Markets endured a bout of heightened volatility last week as improved growth expectations boosted risk-taking. Investors furiously dumped Treasury bonds and growth stocks for cyclical names in anticipation for new stimulus to drive stronger inflation. The days-long trend sparked questions around whether inflation could soon exceed the Fed s target and, in turn, lead the central bank to raise its benchmark interest rate.
Federal Reserve Bank of Richmond President Thomas Barkin says the U.S. could face a bumpy first six months but will be well supported by the rollout of COVID-19 vaccines and fiscal stimulus later in the year.