WASHINGTON – The Russian invasion of Ukraine probably won’t change the “underyling logic” behind the Federal Reserve’s plans to raise interest rates, but the impact on global markets and commodity prices in particular will need to be watched carefully, Richmond Federal Reserve president Tom Barkin said on Thursday.
U.S. interest rates should move higher because “underlying demand is strong. The labor market is tight. Inflation is high and broadening,” Barkin said in comments to the Maryland Chamber of Commerce. Despite the events in Ukraine, “I don’t think you are going to see much change to the underlying logic…But this is uncharted territory so we will have to see where the world goes.”
(Reporting by Howard Schneider)