Fog Deepens Over US Economy as Fed Warns of Instability

Richmond Federal Reserve President Thomas I. Barkin painted a gloomy picture of the US economy, warning that the uncertainty surrounding it has deepened and spread. Speaking at East Tennessee State University on March 27, Barkin likened the economic outlook to 'driving through fog.'

While some indicators look decent on paper - unemployment is around 4.4%, consumer spending remains positive, and GDP grew at about 2% over the previous year - cracks are harder to ignore. Inflation remains nearly a full percentage point above the Fed's 2% target.

Barkin pointed to several sources of instability, including geopolitical tensions related to Iran that are pushing on oil prices. He also flagged the unpredictable effects of artificial intelligence advancements on both labor markets and productivity.