Fed Governor Barr says further policy adjustments likely needed in his base case

In a Detroit Economic Club speech on September 29, Federal Reserve Governor Michael Barr said that in his base case further policy adjustments are likely to be needed after the September rate increase. He described first-half 2026 real GDP growth of roughly 2% and a 4.1% unemployment rate, and said inflation has run above the 2% target for five and a half years. He also laid out AI scenarios covering investment, chip prices and productivity. For traders, the message is that the Fed's bias remains toward tightening rather than cuts.

• Base case: further policy adjustments likely needed after the September increase
• Real GDP grew about 2% annualized in the first half of 2026
• Unemployment rate 4.1%; job creation averaged about 80,000 a month this year
• Speech titled "Economic Conditions and Monetary Policy", Detroit Economic Club