Richmond Fed President: ‘I Wish We’d Done Less’ Fiscal and Monetary Stimulus in 2021

On Wednesday’s broadcast of West Virginia MetroNews’ “Talkline with Hoppy Kercheval,” Federal Reserve Bank of Richmond President and CEO Tom Barkin stated that while fiscal and monetary stimulus was needed in early 2020, “if you look at 2021, there was still more stimulus put into the economy, both monetary and fiscal. And I think with 20/20 hindsight, I wish we’d done less.”

Barkin said, [relevant remarks begin around 6:10] “I put this into two eras, and I talk about fiscal policy, but I also talk about monetary policy, which is what we do. When COVID came and lockdowns happened and no one knew what the future looked like, there was a large amount of fiscal put into the economy and there was a large amount of monetary put into the economy. And both of those, I think, at the time, were needed and helped bridge us through what you’ll remember in April and May of 2020 was a pretty scary time. When we got out of that and we started to reopen the economy, what happened was we still had a situation where unemployment was quite elevated. We still had a situation where inflation was quite low. And I think all of us, as policymakers, imagined we would be fighting a longer-term slog than it turns out we did. And so, if you look at 2021, there was still more stimulus put into the economy, both monetary and fiscal. And I think with 20/20 hindsight, I wish we’d done less.”

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