What does Fed's Barkin mean by saying repeated supply shocks could 'loosen the inflation anchor'?

Barkin means that with inflation remaining above the Fed’s 2% target for over five years—and amid a series of supply shocks—the cumulative effect may erode the credibility and stability of long-term inflation expectations, making it harder for the public to believe the Fed will sustainably return inflation to target; he explicitly ties this risk to how much businesses, consumers, and inflation expectations can 'take' before losing confidence in the anchor.

How has the Iran war–driven energy-price shock influenced the Fed's near-term policy outlook, according to the article?

The energy-price shock triggered by the Iran war has shifted sentiment among Fed officials away from considering rate cuts in the near term, with a growing number now advocating that the central bank signal its next move is just as likely to be a rate hike as a cut.

Fed’s Barkin Says Repeated Supply Shocks Test Inflation Anchor

May 21, 2026

Richmond Fed President Tom Barkin warned that cumulative supply shocks, including an energy-price spike from the Iran war, challenge the US inflation anchor and may delay interest rate cuts.

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Fed’s Barkin Says Repeated Supply Shocks Test Inflation Anchor

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